To The Moon

I am BEARISH on $Enphase Energy(ENPH)$  at these levels.

The daily chart shows the stock in a pronounced downtrend after having put in a blow-off top at $340. It backtested the 144EMA today and failed at that level, causing the stock to bleed to where it closed at the end of the day. Note that today, $QQQ(QQQ)$ closed green but the stock did not! It is much weaker than other names in that regard. 

Based on the levels I have on my chart, I am expecting the stock to first test the 200EMA at about 256-257 or so, followed by the 200DMA at 244.15. These 2 levels are the price targets I have on the stock for now, however, I have my eyes set on the gap fill back to the 210s at some point in the coming weeks and months. Given how bearish the market sentiment has been, stocks have been treating gaps like magnets and filling them left and right!

That being said, do expect the stock to have intraday volatility and bounces to reset RSI. Currently, the 14-day RSI is near oversold territory (34.55). However, as we have seen with companies like $Tesla Motors(TSLA)$ , oversold can become even more oversold!

As for the Bollinger Bands, the stock had previously broken the middle band and has since been on the downtrend. Nothing much to report on that front. 

So, how do we trade this? You can consider getting PUTS (260P or 257.5P) expiring 4-5 weeks from now, and hedging with a smaller position of calls (270C or 272.5C) in the event that the stock has any unexpected positive catalysts or new macro developments arise. Good luck everyone!

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