The bounce in long-suffering solar stocks could be for real, according to the charts

Posted By: EN Todayon: June 03, 2024In: Renewable Energy News

Solar stocks were out favor last year, noting the Invesco Solar ETF (TAN) lost nearly 27% in an extension of its long-term downtrend, which has been in place since early 2021. However, there are signs of stabilization in TAN from a technical perspective after two successful tests of last year’s low near $41. The latest retest of support was associated with a counter-trend ‘buy’ signal from the DeMARK Indicators, which gave way to the current relief rally. The signal supports another month of upside follow-through but can lead to a more sustained reversal, which we think is likely. The successful tests of support have resulted in a positive divergence between the weekly MACD and price since the beginning of this year. The momentum divergence in TAN is made more compelling by its confirmed breakout above the 200-day (40-week) moving average, which is a positive catalyst that suggests newly overbought conditions can be sustained. Additionally, First Solar (FSLR) , which makes up nearly 16% of TAN, just confirmed a breakout to a new 52-week high. The breakout is a long-term bullish development for FSLR and should be a tailwind for TAN. Next resistance on TAN’s chart is roughly $55, defined by the December high. This level looks achievable in the coming weeks per our indicators. A breakout above the December high would support an extension higher toward long-term trendline resistance, near $65. —Katie Stockton with Will Tamplin Access research from Fairlead Strategies for free here . DISCLOSURES: (None) THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. 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