Array Solar - Another New Solar Company Hits The Market

04/15/21 02:18:26 PM

by Matt Blackman

It's been a busy year for new solar entrants. How many will survive and thrive remains to be seen.

Security: ARRY
Position: N/A

Array Technologies is "one of the world's largest manufacturers of ground-mounting systems used in solar energy projects." Its main product is an integrated system of steel supports, electric motors, gearboxes and electronic controllers used in solar axis trackers, according to the company website.

It began trading on the Nasdaq on October 15, 2020 under the symbol ARRY with an opening price of $29.50. The stock closed out the day at $36.45 on trading volume of 33.96 million shares. ARRY got a volatile start in a volatile market managing to rise to a high of $54.78 on January 8, 2021 before it began a rapid retreat to hit an intraday low of $26.13 in late March. It looked to reverse course into April.

Figure 1. Daily chart of Array Solar which began trading October 15, 2020 and rose before peaking in early January then falling to below its IPO price. The green arrow indicates its break above its down sloping top resistance line.

Graphic provided by: https://finviz.com/.

As we see from Figure 1, this recent rise pushed the stock above its down-sloping top trend resistance line on April 8 which is a technical buy on 1.4 million shares, well below the 3.6 million volume average (see green arrow). The fact that the stock broke out on below-average volume is bullish, especially if the March lows hold. Low volumes on rising prices tend to show quiet accumulation by the smart money.

Traders will be looking for a new base support to be confirmed in the coming trading days and rising volume to confirm that new buyers are entering the stock.

Figure 2. One year (to April 12, 2021) showing the top performing industries with solar at the top of the list.

Graphic provided by: https://finviz.com/.

Fundamentally, ARRY reported annual revenues of $872.67 million and earnings per share (EPS) of $0.49 for the year ending December 2020 up from $647.9 million and $0.33 per share in 2019 according to data from Macrotrends.net.

An increasing number of players are entering the solar market as governments approve a growing number of solar and wind projects for new electricity generation. The good news is that costs for both continue to fall. It remains to be seen what impact this will have on solar company profit margins as the market gets more competitive.

Matt Blackman

Matt Blackman is a full-time technical and financial writer and trader. He produces corporate and financial newsletters, and assists clients in getting published in the mainstream media. Matt has earned the Chartered Market Technician (CMT) designation. Follow Matt on Twitter at www.twitter.com/RatioTrade

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Array Solar - Another New Solar Company Hits The Market

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