We'll start with the bad news. Although we bought Three Sixty Solar (VSOL:NEO;VSOLF:OTC) at what looked like a good entry point early in April, and it rose sharply after we bought, it then did an about-face and slammed down ahead of and on news of substantial funding, so we are currently nursing a significant loss.
Now for the good news — the funding is at 60 cents, which is a little above the current price, and it is expected to be completed within a week, which will remove pressure on the stock, which will be free to advance again. The other good news, or rather an important point to keep in mind, is that the company has a patent on a vertical tower solar panel system that can be integrated or share the same towers as communications networks.
Why is this a big deal?
It's a big deal because all the extensive "solar farms" that currently exist all over the world are "out in the boonies," and as a result, a staggering two-thirds of the power they generate is lost due to leakage because of the distances involved in getting the electricity to market.
In addition, the vast areas of land consumed by these solar arrays generally mean that they can't be used for anything else, so there is a serious opportunity cost loss as well.
Three Sixty Solar's vertical tower arrays can be placed virtually anywhere, including in cities, and also be combined with communications towers, so the loss of power generated due to distance is relatively small, and they take up little space. It is thus clear that this is the way forward and that Three Sixty Solar's towers will eventually render all these vast acreages of solar panels all over the place obsolete.
This being so, its stock has the potential to appreciate by many thousands of percent.
Alright, so having covered that, let's proceed to look at the charts. Starting with the 6-month chart, we see that although we bought at what looked like a reasonable entry point at the time, and the stock did rise sharply for a short period afterward, we got stung when it slammed down on the news of sizeable funding.
The key point to note about the heavy drop that has brought the price back into a zone of strong support at earlier lows is that it was on a much lighter volume than the two big rallies this year. This is clearly bullish and explains the overall impressive strength shown by the Accumulation line, which has held up well on the recent drop.
It is now substantially oversold, and with the price of the funding now above the stock price, and this funding due to be completed within a week, this clearly looks like a great point to buy or add to positions.
The 1-year chart, which shows all the price history to date, is useful as it shows the origins of the support underpinning the price in this area and further emphasizes the strong volume pattern, with big volume on the two main rallies and much lighter volume on the reactions that followed which as mentioned above is clearly bullish and explains the overall strength of the Accumulation line.
The conclusion can be none other than that Three Sixty Solar is a very strong Buy here, and it is viewed as an excellent long-term investment a point to note in closing is that, while we may take profits on a trading basis on rallies when it becomes extremely overbought, the emphasis will be much more on adding to positions on dips.
Three Sixty Solar's website.
Three Sixty Solar Ltd. closed at CA$0.58, $0.44 on May 19, 2023.
Originally published at clivemaund.com on May 21, 2023, at 12:00 pm EDT.
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The above represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.