DESC

[David Randolph]

Distributed Energy Systems Corp. (DESC) creates and delivers products and solutions to the emerging decentralized energy marketplace, giving users greater control over their energy cost, quality and reliability. As the parent company of Proton Energy Systems (http://www.protonenergy.com) and Northern Power Systems (http://www.northernpower.com), Distributed Energy Systems delivers a combination of practical, ready-today energy solutions and the solid business platforms for capitalizing on the changing energy landscape. For more information visit http://www.distributed-energy.com.

The breakway gap was made when the company raised guidance for the full year 2005:

Distributed Energy Raises Guidance for 2005

As you can see in the chart below, DESC jumped above a resistance level without touching it, which is the definition of a breakaway gap (those that are never closed  ):



Energy has been the hot sector of the year, and that's a wave that lifts all boats (what is the correct expression? thanks), specially the ones with improving fundamentals as DESC.

The stock doesn't look like it wants to close the gap, it looks like it is running away from this area. This is one of my preferred chart patterns, since risk is low (you don't want to see the stock start coming down to fill the gap) and potential profit is high:



I've decided to buy DESC for the 3 Stocks on Fire Portfolio at today's open.

3 Stocks on Fire Community take on DESC

This analysis is part of Top 5 Stocks for Tuesday, conducted by David Randolph from 3 Stocks on Fire. David Randolph is managing a public and diversified portfolio which is up 144% since May 2005.

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[Adam]

Earnings are due on August 4th which may keep one wary for holding this long, although it did raise 2005 guidance. Current heavy volume buying may trigger an exhaustion run towards psychological $10 resistance as it starts to develop the early stages of its parabolic form. All three technical indicators are strong - when these develop bearish divergences with respect to price does one need to get worried. A solid Investors Business Daily ranking is an added bonus. The move retains a double top breakout from June 17th on the point-n-figure chart with a price target of $9.50.

[ncham]

new contract

DESC Distributed Energy subsidiary selected by New York Power Authority to Provide Renewable Power System (6.06 -0.03)

Co announces the New York Power Authority (N.Y.P.A.)has commissioned DESC subsidiary Northern Power Systems, to design and install a 165- kilowatt power generation system for the New York City Department of Environmental Protection at its Owl's Head Wastewater Treatment Facility in Brooklyn, New York. Northern Power is undertaking this project under its master implementation contract with N.Y.P.A. to design and install distributed generation projects across the state. 

[ncham]

anyone have a price target in mind? just bought in at $6.15

[stocky]

Another great pick dave. Applaud.

[marshagogo]

You nailed it Dave. Thanks. Got in at $6.05 this am. keep it coming.

[Tirebldr]

Applaud !! Applaud !!! In @6.04. Had to go to inlaws for a couple hours this afternoon and when I got back awesome surprise.

Keep up the great work men. You are the best.....

Thank You

[LJT2]

Great call, in at 6.07.

Awesome site, we are fortunate to have talent like this at our click of the mouse, a giant opportunity is ours.

Thank you.

[Gurukul]

Applaud

[valueseeker]

Great call Dave. In this morning.

[David Randolph]

Thanks for your kind words 

We've had these news yesterday: New York Power Authority Selects Northern Power to Provide Renewable Power System

For a company worth $243.37M this seems to be a big deal (no time now to dig much). The stock is up 5% more in pre-market (it is possible for it to fizzle a bit and come down to close the opening gap, I don't know).

My trading plan is no plan for now, other than letting the profits run ... 

[Adam]

Protecting my profit sold at 6.92.  Good luck to those still holding.  Great pick Dave!!

[randstory]

 I appreciate your call on DESC, David.
I initiated in Distributed Energy Systems, Inc (NASDAQ:DESC) in September, 2004 @$2.12, but most of my position was developed through accumulation in the mid-$3 range, in March, 2005, with my last adds to position in the low $4's, six weeks ago...

The Conference Calls of DESC are exceptional. In fact, I''ve looked for the kind of synergy between Proton Energy and Northern Power (respectively-the hydrogen generation and energy solutions sides of DESC) with other companies where there was a merger of talents- Hydrogenics (NASDAQ:HYGS), which grew from the merger of Hydrogenics and Stewart, and also with Quantum Fuel Technologies (NASDAQ:QTWW)- which is currently showing strength from the integration of  Quantum and Starcraft, now its Tec-Star division...

My price goal for 50% of my position of XX,000 shares of DESC is $9.50, by November, 2005. That's pretty much in line with the Point and Figure numbers:
http://stockcharts.com/gallery/?DESC

I have to balance two factors- DESC has attracted very short term traders; and when DESC retraces, it has done so very dramatically. Therefore- a stock vulnerable to profit-taking.

The other side of the coin- DESC had promised "lumpy" earnings for 2005,, with the nicest  lumps coming in the months now ahead.

DESC is going to be disrtributing Hogens(TM) - their portable hydrogen generators-through
Airgas, Praxair, AND Air Products & Chemicals. 2006 will be a banner year.
Northern Power- the wind turbine/energy solutions side of DESC, is also generating very impressive sales- its clientele are are the best and most influentiail clients.....

So my compromise:
1) Reduce just 8% of my position in DESC on a GTC sell order which, with any buying interest whatsoever tomorrow, will fill in the AM...
2) Keep my 92% long position, and reassess as the Conference Call on Thursday, August 4th, 2005  draws closer. Perhaps another 8% divestiture at $8.00?
3) Consider redeploying some of my capital proceeds to a company I've come to consider similar to DESC- only in that it offers energy solutions, and is very agressive in marketing to high-profile clients.
That company is China Energy Savings Technology (NASDAQ:CESV) . I've been accumulating CESV in the higher$8's, and low $9's.

All the best, David.
Again- thank you for your choices.

                                                    -rand

PS- As I mentioned to you in an email, we share the same first and last names. This got my immediate attention.
                                D.R.

[David Randolph]

David Randolph says great analysis David Randolph  LOL, amazing, you're welcome David 

DESC has a bullish trend after a breakaway gap, everybody sees that. I would like to hold this winner, but I have a problem. You see, any particular stock strategy must be subdued by the general portfolio management strategy, and I have a philosophy: the way to stop a string of losses is to take a profit, even if it is a small one.

Psychologically that will change my apparently losing money mindset.

Over the last couple of days I took 3 losses in a row and GEMS today will be the fourth. Taking a profit in DESC will stop this and will make me psychologically available for profits, refusing to enter a down mood.

DESC did a doji too, which shows indecision from traders to continue the bull run, so profit taking probably is on his way as David Randolph (not me, lol) says.

So I'll take a profit on DESC today, not for a particular reason, I need to stop a string of four consecutive losses.

[rocket8]

i was surprised to see you buy in the first place on a GAP up.
i am glad to see you take profits when possible.
i think that was a problem we had lately (or at least i did).

"letting the profits roll" is good but sometimes it seems they fade away fast too.