New information has surfaced to make me consider reducing the size of my position in $SEDG

I entered the trade based on increased demand for their products, which remains to be true. However, the supply side of the equation was a problem in Q2. Now the heatwave in China is causing some factories to shutdown for a few days. I am unable to determine if SolarEdge's supply chain is actually effected or not but this seems like a fool me once shame on you, fool me twice shame on me situation.

Last quarter the company's margins & output were negatively effected by factors outside of their control, and now it looks like there is a risk of this occurring again. Core to my bull thesis was rising energy costs in Europe but I also failed to recognize how this could be a double edge sword for a company that has a factory in Europe. Rising input costs and potential limitations of energy use is a problem for all European manufacturers.

So to sum it up SolarEdge may once again be negatively effected by supply chain issues in China, are facing rising input costs at their European factories, and also face currency headwinds due to the EUR weakening relative to USD.

I still believe in the company long term and believe investing in inverters is the simplest method to bet on a widespread increase in demand for solar energy. It's like if you were bullish on new car sales you could bet on tire sales, inverters are that essential to the functionality of a complete solar system. $ENPH trades at a richer multiple than SolarEdge but now this premium is starting to make sense, as Enphase may be the superior instrument to bet on inverter sales.

For now I am keeping my position intact as the technicals of the chart remain solid. The company is above the 50 & 200 moving day averages but if momentum begins to fade I now have stop orders to trim my position accordingly.