Daily Traders Edge

Don’t sleep on solar stocks, trader says. Why he sees value in the names

April 08
10:13 2021

Solar stocks are wavering despite lofty expectations.

RBC Capital Markets initiated coverage of Sunrun on Wednesday, rating it outperform and giving it a price target of $81 per share. Even so, shares of the solar panel maker closed 4% lower at $54.21.

The Invesco Solar ETF (TAN) also took a hit on Wednesday, falling 3% to $86.48. The popular fund is now down about 29% from its high in January.

Katie Stockton, managing partner and technical analyst at Fairlead Strategies, has been watching the weakness play out for some time.

“Solar stocks had been under pressure along with growth stocks,” she told CNBC’s “Trading Nation” on Wednesday.

Stockton said Fairlead had initially recommended shorting Enphase Energy, TAN’s largest holding, but later said to cover the position as a short-lived correction in TAN appeared to stabilize.

“I think this is a nice staging ground for a potential relief rally,” Stockton said. “The ETF had already been up nearly 500% of that Covid low from last year. Retracement like this is healthy, in our opinion, and something that can contribute to the long-term uptrend.”

Continue Reading at CNBC

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