Nexxus Lighting (NEXS) made a key technical move a couple days ago, surging with heavy volume above the 50 day moving average on news the company will commercially sell its new LED BR30 bulb in March.

The LED is expected to replace the incandescent 65W BR30 bulb and use about 85% less energy.  It incorporates an enhanced dimming circuit, 2nd generation technology allowing for significant reductions in cost and weight and is expected to exceed ENERGY STAR standards.  While initially priced at $29 per bulb, the company believes the cost will drop quickly and depending on demand could get below $20.

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The company estimates that the new LED bulb would not only reduce energy 85%, but the need for 24 incandescent replacement bulbs over the life span of one LED.  Now, let me just remind the LED naysayers who repeatedly overlook all the associated costs with incandescent vs LED bulbs and say LED is still way too expensive (they often over look the labor of the replacement cost).  Sure the initial cost can be significant and the savings in bulbs over the lifetime of an LED is relatively meaningless (in this case about $75 for 25 incandescent bulbs vs $29 for the LED).  It’s the energy savings and the maintenance costs that really begin to pay off.  With some rough calculation I estimate the break even point to be about a year or so in this case.  After a year, possibly two in some cases, the savings can be significant for a large company.

Technically, shares of NEXS look intriguing down here with that move above the 50 day moving average.  I mentioned back in November that I liked the stock and it’s dipped a bit further from there, but I still like it down here.  It’s a compelling entry point here.

Disclaimer: I have no position in NEXS currently, but considering a position within a few days.