Santa Claus shafted stock investors this year in virtually ever industry except one: solar stocks. See, unlike those unruly children running wild in every other sector, solar stocks behaved themselves heading into Christmas, and old Saint Nick rewarded them with relative strength galore.
The fresh strength in solar is on full display in the Guggenheim Solar ETF (TAN). Check out the bottoming action in the fourth quarter in the accompanying chart. The solar ETF based sideways long enough to turn the 50-day moving average, lending credence to its bottoming bid.
And the volume, oh look at the volume. It’s a thing of beauty. Accumulation days have descended in the land of solar stocks en mass showing some serious interest by the big boys.
And the icing on the cake? How about the low-risk entry beckoning to one and all this week? TAN is boasting a sweet-looking pullback just ripe for a reversal.
With all that in mind, here are three solar stocks to buy for continued strength out of the sector.
Solar Stocks to Buy: SolarCity Corp (SCTY)
Topping our list is SolarCity (SCTY), and it deserves high marks. Its performance over the past six weeks is oozing with strength.
SCTY stock is up 100% since mid-November, for heaven’s sake. Those who weren’t in during the early stages of the turnaround are looking on with envy to those lucky enough to stumble into doubling their dough over the holidays.
If you’ve been waiting for a low-risk entry into SCTY stock, wait no longer. Monday’s moonshot of a rally was all the signal you should need to jump aboard the stock.
Buy SCTY now. It already triggered its dip-buy setup with Monday’s pop.
Solar Stocks to Buy: First Solar, Inc. (FSLR)
First Solar (FSLR) has been a leader in the solar space for months now, and its relative strength has been outstanding. The trend in FSLR stock that has taken root isn’t too shabby either. It has been accompanied by rising 20- and 50-day moving averages along the way.
If Monday’s pop is any indication, the recent pause in FSLR stock is poised to morph into yet another advance. A breakout over $67 (to $72 as of this writing) is a signal that the next up-leg is upon us.
Buy FSLR stock now.
Solar Stocks to Buy: SunPower Corporation (SPWR)
SunPower (SPWR) rounds out our trio of picks. Although its ascent hasn’t been as meteoric as SCTY or FSLR stock, its recent action is intriguing nonetheless. SPWR stock made a turn in the fourth quarter and now boasts rising 20- and 50-day moving averages.
The past few days of consolidation, along with Monday’s down gap and surge, have allowed SPWR stock to work off some of the overbought pressure. While a little more basing will do the stock some good, would-be buyers should keep an eye on the $31 resistance level. A break above that should kick off its next advance.
Buy SPWR stock above $31.
As of this writing, Tyler Craig did not hold a position in any of the aforementioned securities.