Solar energy stocks are known to be rather choppy in behavior, which is why last Friday’s breakout to 2013 highs of the Guggenheim Solar ETF (NYSE:TAN) sparked my interest.

Through a multiyear lens, the exchange-traded fund — and thus, its holdings, too — has had a rough go of it in recent years. But the bleeding stopped in November 2012, when solar stocks started to rise again alongside the broader market. With the Guggenheim Solar ETF up roughly 40% year-to-date, this group has made a strong statement.

Furthermore, last Friday’s breakout past its February highs saw follow-through buying on Monday and thus puts the group in a continued bullish spot for now.

The breakout of solar stocks last week is simply the continuation of the theme from the past few weeks, where we’re seeing breakouts in one group of stocks after another. If the broader market can keep it up, this group also should see more investors chasing it higher.

On the daily chart below, note the higher low that TAN developed in early April vs. its November 2012 low, which ultimately led to new 2013 highs just yesterday.

First Solar (NASDAQ:FSLR), which is higher by 75% year-to-date, is the largest holding in the Guggenheim Solar ETF; roughly 19% of the fund is allocated to this stock. First Solar — and by extension, the solar energy ETF — is somewhat overbought in the immediate-term. However, any constructive consolidation above $20.50 for the TAN now favors further upside in coming weeks.

Important to note, however, is that given the strong rally in the broader stock market, any significant one-day bearish reversal in the S&P 500 likely also would lead to some profit-taking in the solar space, and thus TAN.

Serge Berger is the head trader and investment strategist for The Steady Trader. Sign up for his free weekly newsletter here.