Dr. Duru

Solar Stocks Show Signs of Life

A good way to answer the question is to juxtapose the news during the week that helped the solar stocks in the face of an otherwise weak stock market. I noted a few, there is likely more:

1. Solarfun's earnings (SOLF) - I consider this company questionable but the market temporarily interepreted the report as a big positive
2. Germany's Solarworld posted great earnings
3. News (rumors) early in the week that the Congress would extend tax credits and subsidies to bolster solar energy (seems that this is still at least a month away or more. I have read concerns that partisan politics could impede progress)
4. Several analyst upgrades and positive commentary on companies such as Jaso, Suntech, and Fisrt Solar
5. California announcing huge solar projects
6. FPL announcing it was getting into the game with a large solar utility project

So, the stars, so to speak, aligned last week to put a lot of momentum behind these stocks. If you believe that the recent news represents incrementally new good news, then you would be right to buy. If you think that this news just adds to the on-going noisy hype, sit tight.

I am personally sitting tight for now because many of the sharts seem over-bought in the short-term and the overall market's weakness is very likely to drag these stocks back down. I also do not like the way most of the solar stocks that reported earnings in the past month or so experienced quick pops that were quickly faded to ever lower prices. Very suspicious behavior for a sector that is supposed to have a lot of future positives.