3 Charts For Investors to Watch Tuesday: Enphase Energy, VF Corp., SLX ETF

Here's our daily look at three charts tied to recent news-driven price moves, with key technical levels to monitor.

Enphase Energy, Inc. (ENPH)

Shares in solar company Enphase Energy, Inc. (ENPH) were up in pre-market trading and may see heighted volatility on Tuesday after a regulatory filing revealed that the company will lay off around 10% of its workforce as part of a corporate restructuring. The maker of microinverters and energy management systems for solar installations also plans to consolidate operations by closing plants in Wisconsin and Romania to focus on manufacturing at facilities in South Carolina and Texas. The company warned in October that demand for its products had dropped significantly amid high inventory levels and softening demand in its key markets.

ENPH, which is down about 50% for the year, broke above a multi-month downtrend line earlier this month before retesting the breakout level and subsequently moving higher on above-average volume. Currently, the price trades midway between the 50-day and 200-day moving averages, with the indicators potentially turning into key support and resistance areas on the chart. Recent price action indicates that many of the challenges facing solar companies may already be baked into their stocks.

V.F. Corp.

V.F. Corporation (VFC) plunged 7.8% Monday after the apparel maker said it fell victim to a cybersecurity breach that may have a material impact on its businesses. The company, which houses popular brands, such as Vans, North Face and Timberland, said customers could still place online orders across its e-commerce platforms, but that the security breach had interrupted its ability to fulfill orders. Although the full extent of the incident remains unknown, the company confirmed that the hackers had encrypted some systems and accessed confidential data. The breach comes at one of the busiest periods of the year for retailers amid the end-of-year holiday spending rush.

The VFC share price appears to have carved out an inverse head and shoulders bottoming pattern over the past four months, with a breakout above the formation’s neckline and 200-day moving average late last week. However, yesterday’s selling saw the price retrace and close below the initially breakout point. Investors should monitor how price behaves around current levels to determine if this is a retest of the pattern's neckline before a possible move higher or a potential bull trap.

VanEck Steel ETF

The VanEck Steel ETF (SLX) gained 2.8% on Monday, after the steel industry took center stage on news that Japan’s Nippon Steel planned to acquire iconic U.S. steelmaker United States Steel Corporation (X) in a $14.9 billion deal. The transaction, which equates to $55 per share, represents a 40% premium to Friday’s $39.33 closing price. Shares in rival Cleveland-Cliffs Inc. (CLF), who were also in the running to acquire the 102-year-old steel producer, jumped 10% as shareholders backed the company’s decision not to make a higher counteroffer. U.S. Steel and Cleveland-Cliffs each carry roughly a 5% weighting in the fund’s portfolio.

SLX shares have traded within a broad ascending triangle over the past two years. Investors typically interpret this formation as a continuation pattern that sees the price breakout in the direction of the prevailing trend before the triangle. Indeed, the price did break to the upside late last week and has continued to gain momentum. Given the ETF has climbed steadily over the past two months, investors should look for a possible retest to the triangle’s top trendline before a potential move higher.

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As of the date this article was written, the author does not own any of the above securities.