Not all Elon Musk stocks are created equal. Despite SCTY’s 138% ytd gains, the stock has nearly been cut in half since the May all time highs. TSLA on the other hand is levitating near all time highs up 400% on the year. To be fair, TSLA’s mission is to change the way the entire world thinks of the most common form of transportation, while SCTY is trying to make a buck off of selling solar panels to peeps. Both have their ecological merits, but one is truly doing something revolutionary, and with style.
SCTY’s price action of late has caught my eye, largely due to the under-performance to the TAN (Guggenheim Solar Energy ETF of which SCTY is a component), as TAN flirts with new all time highs, SCTY is making new 4 month lows. The year to day chart below shows the massive disconnect btwn the two (TAN -orange / SCTY – white), after a period, right up until mid July of the two trading in lock step.
Much like TSLA though the price action in SCTY has until recently bordered on “mania” status, but maybe just maybe the recent 37% drop (with barely an uptick) from the Aug highs is a little spoiler for what may come when some of the speculative excesses of the year come unwound, and they will at some point.
The one year chart below of SCTY shows the stock breaking its long term uptrend line for the first time since its IPO on 12/12/12.
This is obviously a fairly precarious technical breakdown, but with Musk as chairman and largest shareholder with 26%, 16% short interest and the top 5 shareholders controlling 60% of the shares outstanding, this stock likely to set up for a bounce like a coiled spring at some point very soon.