Enovix Corporation

Enovix Corporation (NASDAQ: ENVX) is an advanced silicon battery company. The Company designs, develops, and commercially manufactures an advanced silicon-anode lithium-ion (Li-ion) battery using its three-dimensional (3D) cell architecture. Its standard Li-ion battery production involves electrode fabrication, cell assembly and battery packaging and formation.

Recent Financial and Business Updates:

• Manufacturing Progress: Preparations for high-volume production in Malaysia next year were underway, including training of engineers for Fab2 in Penang. Agreements with YBS to utilize their building and direct labor for Fab2 were finalized, with facility preparation in progress.
• Commercialization Advancements: Customer qualifications progressed, and new engagements were secured. The "Active Designs and Design Wins" category in the revenue funnel increased to USD 737 million, while overall customer opportunities grew to 121.
• Global Expansion: Partnerships with Japanese and South Korean companies were announced to expand market reach and distribution capabilities.
• Product Development: IoT and Wearable cell for smartwatches and IoT devices became generally available, and customer products powered by this cell were expected in the market soon. Enovix's product team aligned with customer roadmaps and diversified their approach based on end markets.
• R&D: R&D efforts focused on reducing battery development cycle times using advanced models and machine learning, led by the India team. The unique silicon battery design potentially enabled faster charging and was a target area for additional R&D.
• Financials: Q2 2023 revenue was USD 42,000 from product shipments. GAAP cost of revenue and operating expenses decreased from Q1 2023. The company had USD 409.2 million in cash, cash equivalents, and short-term investments by the end of Q2 2023.
• Outlook: Production forecasted around 36,000 units for Q3 2023. Full-year 2023 operational spending remained at USD 120 million, while CapEx forecast was lowered to USD 70 million due to local funding coverage.

Technical Observation (on the daily chart)

Currently, the stock is near an important zone of USD 12.00-USD 14.00, from where price has taken resistances and supports in the past, and if this level is broken, then the price is expected to correct further to levels around USD 10. The RSI (14 period) momentum indicator is at a value of 37.39, with expectations of some consolidation. Moreover, the price is currently positioned below both the 21-day SMA and 50-day SMA trend-following indicators, which may act as dynamic short-term resistance levels.­­­­­­

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Watch’ rating has been given to Enovix Corporation (NASDAQ: ENVX) at the current market price of USD 14.12 as of August 30, 2023, at 08:10 am PDT.

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing. 

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

How to Read the Charts?

The Green colour line reflects the 21-period simple moving average (SMA) while the red line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The Black colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The Blue colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps with easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices. 

The reference date for all price data, currency, technical indicators, support, and resistance levels is August 30, 2023. The reference data in this report has been partly sourced from REFINITIV. 

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

RSI: Relative Strength Index

USD: United States dollar 

Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.

Disclaimer

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