We have the luxury of being able to trade and invest in many foreign stocks. China has been BOOMING, and particularly in the Shenyang area: an industrial mecca. As manufacturing demand continues to increase, so does the need for power. Today’s Company Invest pick, A-Power Energy Systems, provides onsite distributed power generation systems and micro power grids for industrial companies Shenyang, People’s Republic of China.
COMPANY PROFILE:
A-Power designs, constructs, installs, and tests distributed power generation and micro power grids as stand-alone facilities for various customers in the steel, chemical, ethanol, cement, and food industries. The company also offers automatic control systems to monitor the performance of equipment in the system, including the boiler, turbine, generator, grid supply, and demand and distribution, as well as space and water heating functions. In addition, it manufactures and sells wind turbines.
FUNDAMENTAL TIDBITS:
- A-Power features a LOW price to sales ratio of 0.83, making it a value play.
- Share price of under $6 makes it an affordable trade
- High Beta of 2.95 means profitable, fast trades when technicals flash buy signals
- 16.5% short interest means short covering could elicit a nice gain fast!
COMPANY INVEST TECHNICAL ANALYSIS
Once again, we find most of the US stock market in an overbought state. Not the case with APWR. Starting at the top of the chart is the ADX momentum indicator. The indicator got a bullish +DI cross on 2/13/11 which has since been confirmed. Further, the ADX line which measures trend strength looks ripe for a nice run after bottoming out at the recent 2011 selloff.
Looking at the candlestick daily price chart, APWR had a 3/10 Exponential Moving Average cross (GOLDEN CROSS) yesterday, 2/14/11 that was confirmed with a higher close today. This is extremely bullish. Look at the chart and the excellent signals it gives on the 3/10 EMA cross.
The MACD is a thing of beauty. A POWERFUL bullish divergence is playing out. Look at the WAY higher low that has been formed with the MACD line (black). Also, look for a MACD/signal line bullish cross possibly tomorrow. In addition, the MACD is approaching the zero line, which is also quite bullish.
Finally we look at the slow stochastic oscillator. This oscillator does a good job indicating overbought/oversold conditions. A healthy reading of 45 shows APWR has positive momentum and there is plenty of juice left in it. In addition, the weekly stochastic is low and just got a bullish cross. Company Invest thinks this could also be a great stock to hold even for several months.
Company Invest Bottom Line: This is a great safe entry point for a trade since APWR already has some positive momentum. Also, the stock is in a wonderful position to place a stop right below the 50 day moving average at around 5.55.
