Energy Conversion (ENER: sentiment, chart, options) is roughly 13% higher in early trading after commenting on Solar Integrated Technologies' (SIT) recent U.S. project outlook. Yesterday, ENER took an 18% haircut after SIT cut its 2008 revenue outlook, noting that the U.S. market was being "adversely impacted" by the pending expiry of the Investment Tax Credit along with tightening credit markets. ENER's president and CEO, Mark Morelli, stated, "Our business remains strong, and there has been no change to our fundamentals ... Our largest market opportunities are currently in Europe where there is strong demand for our building-integrated (BIPV) solar product. Germany, Italy, France, and now Spain are growth markets for us. The announced changes in SIT's business do not affect our positive growth outlook."

ENER has fallen 26.4% during the past 4 weeks, but the loss simply takes a little shine off of ENER's 52-week gain of 137%. One potential problem is that the stock could battle resistance at the 65 level throughout the day. Today's surge could be the beginning of a short-covering rally. Slightly more than 22% of the equity's float is sold short, so today's news could have caused some of these bears to buy back their shorted shares - pushing the stock higher in the process. Back to the 65 level; should the equity manage to conquer this region today, we could see it provide a bit of support if needed.