Why I'm Adding PowerShares Clean Energy ETF to My Portfolio

My post over the weekend outlined my concern with the durability of the recent bottom due to a broad sell-off in commodities and materials related stocks. So far this week, their recovery is cementing the notion that we have made an interim bottom (perhaps of several months in duration?). I'm still skeptic regarding the financials as a whole although the best of breed probably deserves some more attention.

I added to my agricultural and base metal positions Monday, and to my existing position in the PowerShares Clean Energy ETF (PBW) yesterday. I've been wanting to add some beaten-down solar energy stocks but haven't yet done the homework in this sector.

PBW has most of the major solar companies among its holdings and will serve as a core position in my portfolio. Its chart features a nice double bottom at $18.50. The downtrend line was just broken, shortly after demonstrating positive divergence.

click to enlarge

Disclosure: Author owns PBW.

Comments

[solar_bull:]

Politics will drive solar farther than the immediate fundamentals. Those that push Kyoto and Global warming will be unable to change there position quickly. Therefore, I expect many EU countries to continue subsidies.

In the US, it is only a matter of time for the politics to catch up. Then the solar stocks will zoom.

2008 Mar 26 03:52 PM

[Top Banana:]

Evergreen (ESLR) is well positioned. String ribbon technology (low silicone demand) and low cost productivity. You heard it here first ;-)

2008 Mar 27 05:35 AM