By Nigam Arora
Trump China Ban
Previously, we shared with you that President Trump was banning the import of connected inverters from China.
President Trump has banned the import of connected inverters from China. China has been dumping inverters at a low cost. The purpose of the ban is to protect the U.S. industry. Inverter company Solaredge Technologies Inc (SEDG) is a beneficiary.
Pivot To AI Data Centers
Traditionally, SEDG has provided inverters to solar power. However, SEDG is pivoting to provide inverters for AI Data Centers. This is a huge opportunity for SEDG.
Buy Signal
Previously, a buy signal was given to The Arora Report paying members of ZYX Buy Change Alert. To see the buy zone and recommended position size, click here to take a free 30 day trial to ZYX Change Alert.
Earnings Ahead
SEDG will report earnings on August 5 before the open. The momo crowd tends to buy before earnings because they focus on potential upside and do not factor in risk.
The reality is that earnings are a risk event, both to the upside and the downside. The Arora Report members are part of the smart money. Smart money tends to reduce risk ahead of earnings.
SEDG can be very volatile on earnings. The projected downside is $28.00 – $32.00. The stock is trading at $38.65 as of this writing. The projected upside is $56.00 – $64.00, but the stock can easily experience a short squeeze that can carry the stock as high as $80.00.
Favorable Risk Reward
Even though the risk/reward is favorable, it will be important for anyone who has taken this trade to consider reducing the position size to 10% or less prior to earnings based on their personal risk preference.
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This post was just published on ZYX Buy Change Alert.
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Nigam Arora
Nigam Arora is known for his accurate stock market calls. Nigam is a distinguished master of the macro. He is a popular columnist with over 100 million page views, an engineer, and nuclear physicist by background. Nigam has founded two Inc. 500 fastest growing companies and has been involved in over 50 entrepreneurial ventures. He is the developer of Theory ZYX of Successful Change Management and is the author of the book on Theory ZYX, as well as the developer of the ZYX Change Method for Investing.
