More than a month ago our fellow research team member Ralf Lai published this article in the public domain 4 Solar Stocks To Play The Solar Sector Breakout In 2018. He made the point that solar stocks are breaking out, and, in doing so, they could become wildly bullish in 2018 and beyond. He also identified 4 solar stocks that look worth considering for long term portfolios. This was a spot-on call, and today we get the confirmation of a breakout.
From the previously mentioned article:
The solar panel market has shifted from trial stage to early adopter stage. According to ResearchMoz, the global market for solar panels is expected to reach US$180.7 billion by 2021. The Chinese government’s significant investment in solar PV is the major driving factor. China was the market leader in terms of the installed capacity as of 2015, having a total capacity of 43.530 MW. Germany, Japan, and the United States were holding the second, third, and fourth place, respectively.
Ever since the solar stock ETF TAN has been introduced and tradable in Apr 2008 this ETF has been in a non-stop downtrend. After achieving a real bottom in Nov 2012, price has been consolidating for 7 years making the bottoming formation look potentially like a W pattern. Though April’s monthly candle is not completed yet it does seems that price has finally broken the blue downtrend line to the upside.
The chart below, although a different format and timeframe (weekly as opposed to monthly in the above mentioned article), shows the breakout that is taking place right now.
Note, this is one of the few textbook setups for markets that break out.
Why is a textbook breakout example? Because it drastically decreases the probability of a false breakout, which, of course, is something investors want to avoid at all costs.
Note that we followed up recently with a specific solar stock: Clean Energy Stock FuelCell (FCEL) Starting A Great Comeback In 2018. As TAN ETF is breaking out, we expect FCEL to break out soon as well. Watch the $2.00 in FCEL as the breakout level.
The solar stocks subsector looks awesome, and seriously profitable for investors that take positions early in this breakout process.