Solar Sees The Sunshine

Solar names have been behaving well recently and it looks like a few are starting to turn up again.

First Solar is always one to watch in the industry group and this week it is displaying a beautiful setup. After sitting below the 10-week moving average for 6 weeks, it has now made a nice push and is just slightly below 52-week or one-year highs. The full stochastic is usually the first to turn up on a weekly chart and this turn is very bullish with the retracement holding and bouncing near 50% on the full STO indicator. The SCTR ranking in the top panel suggests the stock looks very good and the price action is outperforming most of the large cap peers.

Sunpower is another great looking chart. Last week it tested the breakout level at $11.90 and this week it is surging. If the price of crude is going up, that may improve the economics of solar power so these charts may be reacting to the surge in crude oil. The price action on each of these stocks is holding up in the face of oil price declines late this week.

The SCTR ranking shows it as one of the best stocks out there. The relative strength shown in purple is also jumping to multi-year highs. The full stochastic has pulled back but is turning up again. The price is doing a text book breakout, pullback to the breakout level and now surging away on higher volume. The momentum indicator is well above zero for the first time on this 5-year chart. I added two more years to the chart so you could have a little context on how big this breakout is and the potential upside of the stock.

The ETF representing the solar industry is TAN. This chart also looks great for a more diverse way to invest in the industry. This chart also sports some great indicators.

The SCTR ranking suggests it is one of the best ETF”s in the ETF Universe. The relative strength in purple is making a higher 4-year high. The push this week is taking the ETF to new heights. While the volume is not as robust, it is still solid and the PPO momentum indicator is nice and high, suggesting lots of momentum.

The solar and renewable energy space has been pretty good all year and it looks set to continue.