Has the Solar ETF TAN Bottomed?

February 7, 2024

Mish's Daily

By Mish Schneider

Here is my post on X as of Tuesday:

Here is a thought from my Outlook 2024-

Environment - Solar stocks did not have a good 2023. For 2024, we are watching First Solar ($FSLR), and the ETF Invesco Solar Energy (TAN). $TAN new multiyear lo this week but back above the lows of Oct 2023-we are watching 4 an entry

And so, we entered the ETF before yesterday’s close based on a few technical factors.

First, I like to follow my own recommendations from the Outlook that I write in December, when I have little bias during the holidays. I just want to find good trades potential.

Secondly, when I looked at the weekly charts, I saw that the last swing high before the huge parabolic move in TAN in 2020 was exactly where the current price was.

Plus, that level was tested and held a few times in the last week.

That gives us a great risk point.

Then, with the bullish reaction to Enphase earnings and the 13% move higher in SolarEdge, we got rewarded instantly.

What does the daily chart tell us now?

Looking at the Daily chart of TAN, we can determine a lot from the price, but also from our ACP plug-ins, featured on our website as well as on Stockcharts.com.

The price is below the 50-DMA so the phase is bearish.

The gap up today confirms that the price action just above 40.00 could be a reversal bottom in the short term or better, for a longer time.

We will watch for a move above the 50-DMA as a great sign that a bigger move is coming.

The calendar range tells us that TAN might have reversed above the January 6-month calendar range low (red horizontal line). That too is a reliable reversal pattern.

The Leadership against the benchmark underperforms SPY, but not by alot.

Momentum or Real Motion tells us that there is a slight bullish diversion between momentum and price. TAN’s momentum sits on the 50-DMA, while price is a good way below that 50-DMA.

Overall, this sector, if bottomed out here and mirrors 2020, could move up to 57 area (the 200-DMA) and higher, which gives TAN a very good risk/reward.

For more detailed trading information about our blended models, tools, and trader education courses, contact Rob Quinn, our Chief Strategy Consultant, to learn more.

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Coming Up:

February 8 Daily Briefing Real Vision

February 8 Schwab midday wrap up

February 21-23 The Money Show in Las Vegas

February 26 CNA Asia First TV and Radio

February 29 Yahoo Finance

February 29 Your Daily Five Stockcharts

Weekly: Business First AM, CMC Markets

ETF Summary

S&P 500 (SPY) 490 support

Russell 2000 (IWM) 195 pivotal, 190 support to hold

Dow (DIA) 385 pivotal