When Donald Trump won the election to become the 47th president of the U.S., the major stock indexes soared. But not all sectors enjoyed the buying frenzy…
“Green” sectors – like renewable-energy stocks – were hit the hardest as most investors assumed they would be hurt by Trump’s new policies.
The Invesco Solar ETF (TAN) hit a multiyear low last week as investors began to question the future of government-back incentives for the industry.
I don’t think there’s a debate when it comes to whether solar will be a part of the future of global energy production. But what is up for debate is the solar industry’s future growth potential without government subsidies.
A few weeks ago, I mentioned that solar stocks and other renewable-energy sectors would eventually fall to a level that makes them an attractive buying opportunity.
What type of opportunity that exactly is remains unclear…
For the right company, it could be a great long-term buying opportunity. Or maybe it’s a swing trade on an extreme oversold situation on a stock’s chart. Either way, I believe this opportunity could be upon us sooner rather than later.
As a result, I’ve started taking a deeper look into solar and other renewable-energy stocks over the last week.
Investors looking to gain broad exposure to the solar sector should look at an exchange-traded fund (ETF) like as TAN. But in this particular situation, I believe the stronger opportunity will be in individual stocks rather than the entire sector.
My approach will be to look at the fundamentals of individual stocks and narrow down my list to companies that I believe have strong upside potential in the coming years. From there, I’ll look at the charts and apply technical analysis to determine the correct timing.
These technical charts will also help us determine the type of opportunity we have on our hands – a long-term buy or a swing trade.
So stay tuned. This is a sector to watch right now. And my subscribers will be the first to hear about the right buying opportunities.
Here’s to the future,
Matt McCallEditor, Market Insights
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