Solar companies have been trading within one of the strongest market segments over the past 18 months. Given the recent market sell-off, prices of key solar-related assets have moved below influential levels of support such as multi-year trendlines. Based on the charts discussed in this article, it appears as though the uptrend has technically reversed, and many active traders are now calling for a move lower over the coming weeks or months. (For related reading, check out: Pros and Cons of Solar Energy.)
Guggenheim Solar ETF
When it comes to gaining exposure to the solar sector, most retail traders turn to the Guggenheim Solar ETF . In case you aren’t familiar, the companies that the fund is composed of span solar power equipment producers and suppliers of materials and services to solar equipment producers. In short, the ETF provides direct exposure to companies that derive a significant portion of their business from solar power installation, integration or finance, as well as companies that specialize in selling electricity derived from solar power.
Taking a look at the chart, you can see that the price has recently moved below the key support of an ascending trendline. This move is significant from a technical perspective because this level has historically been able to prop up the price on attempted pullbacks. Now that the price has moved below, traders will expect the role of support to reverse and become resistance on attempted bounces, likely standing in the way of a major move higher. (For further reading, check out: Top 3 Solar Stocks as of February 2018.)
The recent break below key support levels on the charts of key solar-related assets suggests that the sector could be poised for a pullback. …read more
Read more here: 3 Charts That Suggest Solar Stocks Are Headed Lower
Category: TAN, FSLR, SEDG