Don’t be fooled by the sudden jump in the price of oil or its impact on the broader markets. If long-term investors want more green in their portfolio, they ought to look at these three up-and-coming clean energy stocks.
It’s been a disappointing week for growth investors, who have been holding their breath for a key, market-based follow-through day (FTD) to emerge. And following a resoundingly terrible jobs report, an FTD is yet to emerge, with major indices modestly in the red and a recent rally off lows looking more and more like a dead cat bounce than a meaningful bottom.
Yet despite current volatility, the price of oil and select energy stocks has many on Wall Street gushing with fresh optimism.
Following a move by China to restock its strategic petroleum reserve and President Trump asserting Russia and Saudi Arabia could soon end their oil supply war, the price of oil is sweeping higher off multi-decade lows for a second straight session. In its wake, many badly-beaten oil and gas stocks have caught a temporary lifeline and surged higher including large caps Chevron (NYSE:CVX) and ExxonMobil (NYSE:XOM). Thank god, right?
Bottom-line, bullish price action in CVX stock, XOM and other well-capitalized companies could prove important to more than just those companies’ shareholders. Continued strength in these industry titans could help with a broader technical recovery.
Still, for investors’ with their eye on the future and more sustainable growth off and on the price chart, these stocks should be on the radar.
Energy Stocks to Buy: Ballard Power Systems (BLDP)
Source: Charts by TradingView
Ballard Power Systems (NASDAQ:BLDP) is the first of our energy stocks to purchase. The $1.8 billion small-cap has been around for decades, even lurking around the darker alleys of Wall Street in days gone by. But the proton-based fuel cell play has turned the corner over the past year.
Sales have been growing at Ballard Power, with the latest quarterly results delivering top-line sequential increase of 47% on revenues of $41.9 million. At the same time, year-over-year gains of 10% suggest Ballard’s technologies are finally coming of age within the energy markets. And while it’s not all rainbows and sunshine for BLDP stock just yet, forward-looking investors have shown a healthy interest over the past year.
Currently, this energy stock has corrected to challenging a key support zone backed by multiple Fibonacci levels and prior intermediate highs. Our view is BLDP is a name to pick up on weakness, once a healthier market climate is confirmed with a follow-through day.
Enphase Energy (ENPH)
Source: Charts by TradingView
The next of our energy stocks to buy is Enphase Energy (NASDAQ:ENPH). Prior to the COVID-19 pandemic, shares of this $3.5 billion solar mid-cap were on fire with growth investors. And for good reason too, as ENPH stock sports superior earnings and sales trends, and profitability besides.
Technically, the correction-turned bear market has allowed shares of Enphase to pull back squarely to the intersection of growth and value on the price chart. I discussed as much in mid-March here on InvestorPlace. And that approval bears repeating given ENPH stock’s ability to hold this area and integrity of its momentum-based uptrend.
Net net, if we’re graced with a market-based FTD signal, this is another leading energy stock to pick up at advantageous prices.
First Trust Clean Energy ETF (QCLN)
Source: Charts by TradingView
The last of our energy stocks to buy is the First Trust Clean Energy ETF (NASDAQ:QCLN). For investors that might otherwise shy away from buying individual growth companies, or who simply like the idea of diversifying within this area under one umbrella product, QCLN is an interesting play.
Among this ETF’s top holdings are Tesla (NASDAQ:TSLA), Brookfield Renewable Partners (NYSE:BEP), Albemarle Corp (NYSE:ALB), Hexcel (NYSE:HXL) and SolarEdge Technologies (NASDAQ:SEDG). That’s a mix spanning the myriad possibilities of a greener future of renewable energy. It also smartly offers investors pure-play growth and more value-driven established companies.
Technically and at its recent lows, the ETF’s coronavirus-driven correction has put together an ‘undercut’ double-bottom pattern. The price action is made more compelling as the ETF has recently tested longer-term uptrend support and a 62% retracement level tied to its 2012 low.
Bottom line, should a low become a more meaningful bottom in the broader market, QCLN is a great spot to park some money in energy stocks. And depending on investors’ risk-tolerance, it may be okay for a test drive today as well.
Disclosure: Investment accounts under Christopher Tyler’s management own positions in First Trust Clean Energy ETF (QCLN), but no other securities mentioned in this article. The information offered is based upon Christopher Tyler’s observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.
