3 Compelling Charts Indicating Solar Stocks Are Poised for Growth

Casey Murphy has cultivated a deep enthusiasm for finance through extensive experience writing about active trading, technical analysis, market insights, ETFs, commodities, futures, options, and forex (FX).

The rapid expansion of alternative energy products has captured the attention of both active traders and fundamental investors, particularly in the solar sector. Since 2017, solar-related assets have demonstrated robust upward trends that continue to shape market movements. As detailed below, technical indicators provide little evidence to suggest a reversal is imminent. (For further insights, see: Chart Patterns Indicate Solar Stocks Are Set to Soar.)

Invesco Solar ETF (TAN)

Investors seeking targeted exposure to the solar industry often turn to specialized ETFs like the Invesco Solar ETF. This fund consists of 22 holdings and charges a net expense ratio of 0.70%. The chart reveals a well-established uptrend, with the 200-day moving average and an ascending trendline providing consistent support during pullbacks since the trend began. These critical levels, hovering near $24, are expected to continue acting as strong cushions against steep declines. Many traders use these benchmarks to strategically place buy orders and stop-losses. (Explore more in: Top 4 Alternative Energy Companies for 2018.)

First Solar, Inc. (FSLR)

Active traders often focus on leading companies within niche markets like solar to capitalize on favorable volatility and predictable price movements. First Solar, the largest holding in the TAN ETF with a market capitalization exceeding $7 billion, exemplifies this. Representing 7.54% of the fund, First Solar's chart displays a strong uptrend supported by a reliable ascending trendline that has historically offered excellent entry points. Traders typically set stop-loss orders below $62.38 to mitigate risk should fundamental shifts occur. (For additional details, see: 3 Bullish Chart Patterns for Solar Stocks.)

SolarEdge Technologies, Inc. (SEDG)

Another key component of the TAN ETF, SolarEdge Technologies, has maintained a defined upward trajectory since early 2017. Traders continue to rely on this trendline for placing orders due to its proven reliability. Stop-loss placements are commonly set just below the dotted trendline or the 200-day moving average at $41.02, tailored to individual risk tolerance. (Learn more in: Top 4 Alternative Energy Stocks as of May 2018.)

The Bottom Line

Since 2017, solar and alternative energy stocks have gained significant momentum, with major trendlines and moving averages serving as reliable guides for strategic entry points. Active traders will continue to monitor these technical indicators closely as recent price movements bring these levels into focus once more, presenting attractive risk-to-reward opportunities. (For further reading, see: Why Investing in Green Energy Is a Smart Move Now.)

Charts provided by StockCharts.com. At the time of writing, Casey Murphy did not hold positions in any securities discussed.

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