Acorn Wealth looks deeper into the movements surrounding SunPower Corp(Nasdaq:SPWR) and Allot Communications(Nasdaq:ALLT)
NEW YORK, January 4, 2013 (MESHPRESS) –Following two days of spectacular rallies the markets took a bit of a dip Thursday as enthusiasm over the fiscal cliff quickly dried up. The DOW Jones closed down by 21 points; the S&P 500 dipped by 3 points. As well most S&P sectors finished in negative territory, led by techs and materials.
We see nothing in the resolution of the problem regarding the fiscal deficit and $16 trillion long term-debt however and believe that the market advances will soon be tempered by the realization that there will likely be a real dog fight regarding the debt ceiling and government spending, which will take place between now & the end of February.
The recent surge in yields in the U.S. Treasury market is a definite caution. The yield on the 10-year note closed today at 1.91% and we would consider any move in this rate above 2.10% as an ominous sign. A move of this magnitude would certainly begin to put a crimp on the housing recovery and would no doubt begin to have an effect on consumer spending.
The Federal Reserve has been reportedly buying 80% of all new Treasury issues and if the bond market were suddenly spooked, for any reason, and investors who have been heavily invested in Treasuries were to flee that market, it could have a dramatic impact on rates.
We know we are facing a difficult battle pertaining to the debt ceiling limit and government spending in the U.S. If the market senses that a reasonable compromise cannot be reached or that spending will spin out of control, these could be the factors that would break the bond market.
Today was a very exciting day for SunPower Corp(SPWR) announcing that Berkshire subsidiary MidAmerican agreed to purchase their 579-megawatt Antelope Valley Solar Project. The sale, which includes interest in the project and engineering, procurement, and construction (EPC) services, is said to be in the $2.0 plus billion range. When completed this PV plant looks to be the largest in the nation. To have a project of this size and magnitude sold before it was started is a huge plus to the company. Shares traded up almost 50% following this announcement, settling shortly after market close at $9.13. This announcement helped the entire Bi-solar Index climb 14%. Following a breakout like this how do you know when to sell, how do you know when the next level of resistance is. If you’re interested in how learning technicals can help improve your trading do not hesitate to click the link below.
Allot Communications Ltd (ALLT) the Israeli developer of products to track wireless traffic had its worst day in over 5 years hitting a 52-week low of $13.46. Shares began to dive following an announcement by Oppenheimer & Co. stating that Allot will miss fourth quarter sales and profit expectations. An average analyst expectation sees sales of $31.09 million and net income of $5.5 million. Acorn Wealth will continue to track the movements of Allot, levels of resistance have been broken, what is in store for the future trading of Allot Communications. Was this dramatic sell off warranted or could this be a fantastic entry point into this company which has not traded at these levels since the last week of October 2011.
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It is important to remember that all of the thoughts and commentary discussed here and throughout all our forums are simply reflections of our own personal technical approach to the market and should not be constituted as financial advice.
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