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Vitalii Liubimov's Avatar
published in Blogs
Dec 29, 2020

Bearish Signals from the Bollinger Bands for 5 Renewable Energy Equipment Stocks

The renewable energy industry has performed incredibly well over the last 10 months. After bottoming at $21.11 in March, the Invesco Solar ETF (TAN) has rallied over 400%. As you can imagine, such a rally has caused the ETF and most of the stocks in the group to reach overbought levels on their weekly charts. In most cases they are also overbought on the daily and monthly charts as well.

I ran a scan on December 24 for stocks in overbought territory that also had their daily stochastic indicators make bearish crossovers. On that list were five different renewable energy equipment stocks and the Invesco Solar ETF. The five stocks were:

            First Solar (FSLR)

            JinkoSolar (JKS)

            Sunnova Energy International (NOVA)

            Plug Power (PLUG)

            Sunpower (SPWR)

When I pulled up these five stocks on the Tickeron Technical Analysis Screener, I couldn’t help but notice all five stocks had received bearish signals from the Bollinger Bands indicator within the last three days. Two of the five, Sunnova and JinkoSolar, had bearish signals generated on December 28.

The Tickeron Scorecard has Plug Power ranked as a “sell” and First Solar is ranked as a “strong buy”. The other three have “buy” ratings. Despite the scorecard grades, there are some areas of concern on the fundamental side. All five stocks have poor SMR ratings and four of the five have poor P/E Growth Ratings. We also see that three of the five are overvalued at this time.

I looked at the analysts’ ratings and the short interest ratios for these five stocks in order to get a sense of the sentiment toward them. There is quite a bit of pessimism toward First Solar and Sunpower while the sentiment is neutral on JinkoSolar.

Sunnova Energy and Plug Power both have quite a bit of optimism directed at them right now. Both companies have 11 analysts following them with 10 of the 11 rating the stock as a “buy”. In both instances there is one “hold” rating on each stock. The short interest ratio for Sunnova is very low at 1.6 and Plug’s is below average at 2.49.

What all of this tells me is that if the bearish crossovers from the stochastic indicators and the bearish signals from the Bollinger Bands turn out to be accurate, it will be driven primarily from technical factors. The overbought levels could cause some investors to take profits.

To give you an idea of how the stocks compare to one another and to other stocks in general, I used the comparison feature on Tickeron to compare Plug, Sunnova, and First Solar. If you recall Plug was rated as a “sell”, Sunnova was rated as a “buy”, and First Solar is rated as a “strong buy”.

Related Ticker: TAN

Momentum Indicator for TAN turns negative, indicating new downward trend

TAN saw its Momentum Indicator move below the 0 level on March 21, 2025. This is an indication that the stock could be shifting in to a new downward move. Traders may want to consider selling the stock or exploring put options. Tickeron's A.I.dvisor looked at 82 similar instances where the indicator turned negative. In of the 82 cases, the stock moved further down in the following days. The odds of a decline are at .

Price Prediction Chart

Technical Analysis (Indicators)

Bearish Trend Analysis

The Moving Average Convergence Divergence Histogram (MACD) for TAN turned negative on March 24, 2025. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 50 similar instances when the indicator turned negative. In of the 50 cases the stock turned lower in the days that followed. This puts the odds of success at .

TAN moved below its 50-day moving average on February 27, 2025 date and that indicates a change from an upward trend to a downward trend.

The 10-day moving average for TAN crossed bearishly below the 50-day moving average on March 04, 2025. This indicates that the trend has shifted lower and could be considered a sell signal. In of 15 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .

Following a 3-day decline, the stock is projected to fall further. Considering past instances where TAN declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .

Bullish Trend Analysis

The RSI Indicator entered the oversold zone -- be on the watch for TAN's price rising or consolidating in the future. That's also the time to consider buying the stock or exploring call options.

The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 5 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.

Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where TAN advanced for three days, in of 269 cases, the price rose further within the following month. The odds of a continued upward trend are .

TAN may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.

The Aroon Indicator entered an Uptrend today. In of 210 cases where TAN Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .

Notable companies

The most notable companies in this group are First Solar (NASDAQ:FSLR), Enphase Energy (NASDAQ:ENPH), SolarEdge Technologies (NASDAQ:SEDG), Canadian Solar (NASDAQ:CSIQ).

Industry description

The investment seeks to track the investment results (before fees and expenses) of the MAC Global Solar Energy Index. The fund will generally invest at least 90% of its total assets in the securities that comprise the underlying index. Strictly in accordance with its guidelines and mandated procedures, MAC Indexing LLC, has contracted with S&P DJI Netherlands B.V. to calculate and administer the underlying index, which seeks to track the performance of companies in global solar energy businesses. The fund is non-diversified.

Market Cap

The average market capitalization across the Invesco Solar ETF ETF is 4.27B. The market cap for tickers in the group ranges from 169.42M to 18.04B. FSLR holds the highest valuation in this group at 18.04B. The lowest valued company is MAXN at 169.42M.

High and low price notable news

The average weekly price growth across all stocks in the Invesco Solar ETF ETF was 1%. For the same ETF, the average monthly price growth was 11%, and the average quarterly price growth was 18%. NOVA experienced the highest price growth at 5%, while MAXN experienced the biggest fall at -13%.

Volume

The average weekly volume growth across all stocks in the Invesco Solar ETF ETF was 25%. For the same stocks of the ETF, the average monthly volume growth was -29% and the average quarterly volume growth was 105%

Fundamental Analysis Ratings

The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows

Valuation Rating: 72
P/E Growth Rating: 50
Price Growth Rating: 73
SMR Rating: 80
Profit Risk Rating: 93
Seasonality Score: -42 (-100 ... +100)
Related Portfolios: RENEWABLE ENERGY
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