Thanks for the response too many people post without well thought through positions. Your suggestion of caution is well taken. From a trading perspective, it appears that ENOC has corrected for the dramatic run up after the Supreme Court decision and set a new bottom of its range at around 4.82. I expect the next move to be upward to define the upper end of its trading range. If that upper end is anywhere above 7.73, it would be very bullish for the stock which would surprise me. I expect it to range between 7.50 and 5.00 at least until earnings.
To me, it seems dangerous to short this stock since it has such a volatile upside. That said, its volatility makes for lots of opportunities to profit. What price would you short at?
I still don't know where you are getting your data. Perhaps you can provide a link. When I look up EIA pricing data at the following link, "https://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_5_6_a", it says rates for the US Residential Sector went from 12.48 cents/kilowatt hour to 12.73 cents while CA went from 17.00 to 17.36. These increases are less than 2% but they are increases.
Rates did decline in Hawaii, Nevada, Idaho, Colorado, Texas, Mississippi, Georgia, Florida, New York, New Hampshire, Maine, and Connecticut.
It is rational to assume the continued introduction of solar will reduce the growth in electricity rates and perhaps eventually lead to a decline in rates. This, however, does not appear to have started yet.
I don't know where you get your data. EIA figures on residential electricity prices can be obtained at the following website, http://www.eia.gov/electricity/data.cfm#sales. Specifically I looked at form Form EIA-861 and limited my analysis to the period since 2008 since this has been the period during which we have seen significant increase in residential solar.
If we look at the residential sector for the US (as opposed to a specific state) and the Total Electric Industry (as opposed to a specific provider group), the price/kilowatt hour has gone up every year from 11.26 cents to 12.52 cents, i.e., approximately 2% annually. The same is true for CA although the price increases are a bit more volatile, going up a lot more than 2% in some years and by next to nothing in other years but still rising every year going from 14.74 cents to 16.25. There are states where the price did not go up every year but the only states with lower rates in 2014 than in 2008 were DC, DE, MD, MA, ME, RI, LA, and TX.
Whether this rate increases are sufficient to justify the rising rates in the SCTY contract are another question. Anyone considering solar should do their own analysis and never trust a sales person. In AZ, it has been my experience that most solar customers have been happy with their decision provided they did not install excess capacity.
What makes you sure the DC Court ruling was not the reason PJM did not dispatch DR?
It seems (to me) that FERC rule 745 governed the terms under which PJM dispatched DR without that rule in place, it is not clear that PJM had the authority to dispatch DR.
1. Since January 1, over 40 Million shares have traded; most of which more than 30 million, occurred since the Supreme Court ruling on January 26. Since ENOC has a float under 23 million shares, this suggests there are very few long term holders within that float.
2. Prior to the earnings report on Nov 5, 2015, ENOC was trading close to 8/share. The company indicated the disappointing revenues were due to the fact that its Demand Response capability was not deployed during the summer of 2015. In hindsight, this is not particularly surprising since FERC Rule 745 which enabled Demand Response revenue had been overturned by the appellate court.
3. The day the Supreme Court reinstated the FERC rule, ENOC stock traded as high as 7.73, just slightly below the trading range of Nov 4, 2015. This suggests there are some folks who believe ENOC has returned to the value it had prior to the last earnings.
4. Prior to the appellate court overturning the FERC rule in May, 2014, ENOC was trending upward trading above 20/share. Since that ruling it has trended downwards.
5. Oil prices have followed a pattern similar to ENOC's stock.
My conclusions are:
1) ENOC's stock is tightly coupled to the value of demand response.
2) The value of demand response is coupled to the cost of oil.\
3) The market is very uncertain about how to price this information into ENOC's stock.
I don't know how to translate any of this information into a price for ENOC stock but believe Demand Response will be a critical component of the future energy landscape.
It has been interesting this week. To date over 25 million shares have traded hands in a stock with a float of 22 million shares.
I can't find the data but my memory says electricity prices did not fall during the oil glut of the 80s. The runup in oil prices attracted management's attention to energy costs. This attention has made them aware of the cost reduction opportunities. This awareness will lead to action for several years. With lower prices, it is likely the attention will fade but it will take years not months or days. IMO, there is no relationship between the potential for ENOC's software/services and the falling price of oil over the next 5 years.
We could indeed fall below 50 next week...but not today and we are more likely to see 60 than 50. ... today it will probably close near yesterday's close.
I think you are right...the volume today has been 5 times the daily average and it looks like it will close well above the 50 DMA, i.e., above 48.96. Many technicians will see this as a strong buy indicator and so some momentum players may jump on tomorrow.
Adding to the demand for SCTY stock will be the slower shorts seeking to cover their still open positions which I estimate are in excess of 15 million shares; shares short at end of November (32+ million) minus today's volume (17+ million) gives us 15 million. As short covering dries up the supply of SCTY stock, it will be difficult for the market to meet this demand for several days. Eventually, some of the shorts are likely to reestablish there positions but I would not expect this to happen tomorrow...perhaps not this week.
You may be right...but don't forget there were over 30 Million shares short at the end of November...and today's volume is well below 20 million so there are still a lot of shorts that may want to cover. It is possible that the number of shares available to buy has declined by today's volume.