I mentioned my long-term bullishness on the solar sector overall in my CotD post last month, comparing fallen solar stocks to fallen internet stocks in the mid-2000’s. Putting aside the price action comparisons, the fundamentals are definitely improving for the sector, as solar costs rapidly move lower, Chinese capacity becomes more rational, and financing options expand across the world.
Huge volume on the upside in the last month likely shows longer-term investors getting interested as well, accumulating large positions in a short period of time. But if you missed this big move in the space, this isn’t the best entry. Blogger chessNwine had a good post this morning illustrating the long-term reversal underway in the sector ETF, $TAN, and pinpointed the $20 area as a good spot for a long-term entry on the long side:
At that point, making the all-important higher low to build the longer-term bearish to bullish reversal case becomes the focus. With a slanted “neckline” on that inverse head and shoulders it seems like anything over $20 on the sector ETF would be bullish.
I agree that the $20-$22 area would be the spot for a nice entry. The real question mark in my mind is if we make it back there to get that entry. In any case, I added TAN to the top of my watchlist to make sure I don’t miss it if it does hit my target area.