Enphase Energy, Inc. (NASDAQ:ENPH) is trading higher by more than 4.4% at last check on Monday. This follows a significant jump on Friday, driven by news that the company announced the launch of its new IQ Batter 5P with FlexPhase for customers in Australia — its most powerful home battery.
The long downtrend that the stock has been in may finally be about to end. Enphase could be about to reverse and move higher. This is why it's our Stock of the Day.
Some people say there are no guarantees in the market. But there is one.
And that is that whatever trend is occurring in a market will eventually change.
Markets are always going up, down, or sideways. Sooner or later, these trends will end and new ones will begin.
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If a market is in a downtrend, it is because there is more supply than demand. There are more shares to be sold than there are to be bought.
Sellers are forced to undercut each other's prices if they want to draw buyers in off of the sidelines. This can force the stock into a downtrend.
Eventually, the shares could reach a level where buyers come out of the woodwork. There is enough demand, or buy orders, to absorb all the supply or sell orders. This puts a floor under the price and the selloff ends.
At this point, the tide could turn. The demand may start to exceed the supply. There may be more shares to be bought than there are to be sold. The buyers will be forced to outbid each other to draw sellers off the sidelines.
This could force the stock into an uptrend.
Some traders use trendlines to determine if the change in supply and demand dynamics is a shift or a change. If a downtrend line breaks or is crossed, it may indicate that the trend is over and the stock is poised to reverse and move higher.
As you can see on the chart below, Enphase may be about to cross its downtrend line. The long move lower may finally be over.
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