Is it a good time to invest in solar stocks?
So far in the second quarter, solar shares have posted strong profits and could add points to year-end, ending a multi-year bear market. In response to tariffs, sector facilities have plummeted in the previous year, but panel expenses have also dropped, underpinning sales resurgence projections for the next decade. Other tailwinds for this struggling sector are also lining up, brightening the future.
Short interest has fallen significantly in recent months, suggesting that intelligent cash is moving ahead of the 2020 election, which can elect a leader who reverses the Trump administration’s fossil-friendly policies. Long-suffering solar shareholders can also thank the state of California for a nice portion of the group’s upside, with a law set to come into effect in 2020 requiring solar facilities in new home construction.
The Invesco Solar ETF (TAN) published an all-time high of $307.90 in May 2008, a few weeks after it became public, and entered a steep downward trend that reached an all-time low of $12.60 in November 2012. In the upper $40s, a bounce into 2014 stalled, resulting in a 2015 effort to break out that finished a double top inversion. At the end of 2016 and again in 2018, the subsequent downturn tested the previous low, turning higher into the second quarter of 2019.
At the 200-week exponential moving average (EMA) in March, the uptick achieved multi-year resistance and fitted that level this week, displaying uncommon power. Equally powerful resistance is now in play at the 2018 high above $27, with a breakout signaling a multi-year double-bottom inversion completion. This bullish action, in turn, should open the door to a powerful progress that could reach the top of the $40s in 2014.
Domestic industry giant First Solar, Inc. (FSLR) has been struggling for 12 years through festivities and famine, reaching an all-time high of $317 in 2008 and an all-time low of $11.43 just four years ago. In 2014, it bounced into the mid-$70s, setting up a level of opposition that is still in play as we move towards the new century. In 2019, Upside has for the first time since June 2018 brought the inventory back above the 200-day EMA, but it still trades more than 15 points under range resistance.
Since 2014, price action has sculpted a possible pattern of reverse head and shoulders, with favourable odds that the 2019 uptick will eventually finish the correct shoulder and a long-term split. If so, in the $120s, the rally can achieve huge traction and head for a measured movement goal. Even so, in the mid-$70s, resistance will not give up without fighting, possibly delaying a breakout by 2020 or 2021.
Vivant Solar, Inc. (VSLR) based in Utah is expected to benefit significantly from the installation rule of California in the coming years. In the upper teens in 2014, the stock went to the public and fell to a trading range with assistance close to $7.50. It broke into a steep downtrend in February 2016 that posted an all-time low at $2.16 in May. A 2018 purchasing wave in November overturned at $7.44, resulting in a significant pullback testing long-term shareholders ‘ will.
The inventory rose within a few cents of the high 2018 in May and for the last month has consolidated close to that point. Meanwhile, the accumulation-distribution on-balance volume (OBV) indicator published an all-time high, suggesting good speculation about the effect of the law of California. This bullish action bodes well for a breakout that also mounts resistance during the breakdown in 2016, opening the door to double digits and a long-awaited return to mid-teens resistance in 2014.
In 2019, the Bottom Line Solar shares are gaining ground, shaking off headwinds on overseas panels from 2018 tariffs.