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Trading Any Market

Solar Energy Sector ETF Breaking Out – How to Trade It

Companies / Solar Energy Jun 17, 2014 - 06:22 PM GMT

By: Chris_Vermeulen

Companies

During the past couple months several indexes, sectors and commodities have sold off more than 10 – 20%. But now some are looking like new buying opportunities. Over the next week I will bring a few of these trades to your attention as they start to unfold.

Today we are looking at the TAN solar ETF. This sector recently had a 23% hair cut in price. A 20-25% correction in price is a typical intermediate correction for a fast moving sector. The price correction has pulled the sector down to its 150 and 200 simple day moving averages. These levels tend to act as long term support for investors, a buying point.


Many of the individual stocks within this sector are starting to pop and breakout of bullish price patterns. These individual stock prices point to higher prices for TAN going forward.

Be aware of crude oil…. I do think that as long as the price of crude oil stays up solar stocks will continue to rise overall. But if oil starts to roll over and break down, TAN will struggle.

My Technical Take on The Chart:

Big picture analysis shows a powerful uptrend with bullish consolidation.

Intermediate analysis shows a falling bullish wedge, test of moving averages, and a reversal breakout pattern.

Short term analysis shows we are at a resistance level and we will likely see a pause of pullback over the next few days before it goes higher.

TAN Trading Conclusion:

If price closed back below the $39.00 I would consider this bounce/rally failed.

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Chris Vermeulen

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Chris Vermeulen is Founder of the popular trading site TheGoldAndOilGuy.com.  There he shares his highly successful, low-risk trading method.  For 7 years Chris has been a leader in teaching others to skillfully trade in gold, oil, and silver in both bull and bear markets.  Subscribers to his service depend on Chris' uniquely consistent investment opportunities that carry exceptionally low risk and high return.

This article is intended solely for information purposes. The opinions are those of the author only. Please conduct further research and consult your financial advisor before making any investment/trading decision. No responsibility can be accepted for losses that may result as a consequence of trading on the basis of this analysis.

Chris Vermeulen Archive

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