Key Takeaways
- Enphase Energy shares remain in focus this week after the stock logged its fifth consecutive lower close on Friday amid concerns over persistently high interest rates and insider selling.
- Higher interest rates for longer could keep demand subdued for the company’s range of solar products, such as panels and inverters.
- The Enphase share price trades within a symmetrical triangle, with support around $107 and resistance near $131.50.
Enphase Energy (ENPH) remains in focus this week after shares in the solar solutions provider logged their fifth consecutive day lower on Friday as renewed concerns over persistently high interest rates and recent insider selling pressured the downward trending stock.
Hotter-than-expected readings on consumer and wholesale inflation last week helped push Treasury yields higher amid concerns that the Federal Reserve may be forced to postpone cuts to its benchmark interest rate. The Fed has said it needs further confirmation that price pressure are under control before cutting rates, which are currently at a 23-year high.
This creates challenges for Enphase, which has struggled with high financing costs and sluggish consumer demand. Over the past year, the company has seen a slump for solar panels in both its U.S. and European markets as higher rates have kept would-be solar buyers on the sidelines.
CEO Badri Kothandaraman told investors on the company’s latest earnings call that he thinks the first quarter will mark the bottom in the solar industry, saying that he expects demand to improve throughout 2024 as borrowing costs fall.
Enphase shares faced further downside pressure late last week after a recent U.S. Securities and Exchange Commission (SEC) filing revealed that the company’s executive vice president and chief commercial officer David Ranhoff offloaded 5,000 Enphase shares on March 15 at prices ranging between $107.49 and $109.91 per share for a total transaction value of $544,425. Following the sales, Ranhoff holds 124,948 shares of the company’s common stock, according to the filing. In the past three months, company insiders have sold more stock then they have purchased, with net activity showing a sales surplus of 378,943 shares.
Enphase shares have traded within a broad symmetrical triangle since bottoming out in early November last year, with the pattern possibly indicating a market bottom. Last week’s grind lower places the price near the triangle’s lower trendline around $107—an area on the chart where the stock may find buying interest. If the shares move back to the upside from this level, keep an eye on the $131.50 area, where the price could encounter a confluence of resistance from the pattern’s upper trendline and downward sloping 200-day moving average.
Enphase shares lost 17% of their value last week, closing at $107.73 on Friday,
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