In the midst of a broader equity market sell-off following the latest inflation data, one industry group stands out for its resilience – solar stocks. The surge in solar stocks was triggered by the presidential debate and fueled by renewed optimism for renewable energy, especially in anticipation of a potential victory by Vice President Kamala Harris in the upcoming November elections.
Despite a challenging year, with the Invesco Solar ETF (TAN) down over 25% year-to-date, compared to the S & P 500’s +14% and the Nasdaq 100’s +11%, there are still bright spots within the solar sector. Two standout stocks in the group, First Solar Inc. (FSLR) and Sunrun Inc. (RUN), have displayed notable strength amidst the market volatility.
Earlier this year, FSLR experienced a significant outperformance relative to the S & P 500, reaching a high just above $300 in mid-June. However, the stock retraced and found support around $210, establishing a trading range between $200 and $240. This price range aligns with previous resistance levels from 2023, underscoring the significance of these price levels. Investors should monitor for a confirmed breakout above $240, signaling a potential retest of the 2024 high near $300.
Sunrun presents a more compelling technical setup, already in a confirmed uptrend. After finding support around $9 in late 2023 and retesting that level in early 2024, the stock has formed a pattern of higher highs and higher lows. Pullbacks to the 50-day moving average have served as optimal entry points in the current uptrend. Despite potential overhead resistance in the $20-24 range, a breakout above $24 could pave the way for further upside momentum.
During periods of market uncertainty, identifying sectors and stocks that defy the broader market trends can provide valuable insights. While solar stocks still face challenges, their promising technical setups indicate potential opportunities ahead of the November elections. Investors are advised to closely monitor the solar sector for further developments and market opportunities.
The recent upsurge in solar stocks amidst a market downturn highlights the resilience and potential of the renewable energy sector. Both First Solar Inc. (FSLR) and Sunrun Inc. (RUN) exhibit favorable technical patterns, presenting opportunities for investors to capitalize on the sector’s strength. As the market landscape continues to evolve, staying informed and vigilant in monitoring these stocks can help investors navigate through uncertain times and identify potential investment opportunities.