The solar stocks has not really been performing well recently and there could be further selling pressure into March 2010. I have been following Solar Energy Index ETF (TAN) and it looks like it is setting itself for further decline.
As you can see from the one year chart below, TAN has been trading between support ($8) and resistance ($11) levels for past 10 months. TAN has formed this channel where it has failed several time to make a break out. TAN has retraced to resistance level 4 times and touched support level 5 times. Currently, TAN is trading below $8 and if it cannot rally back to $8 level, there could be further decline into $6 range.
Let’s now look at First Solar (FSLR), the largest component in TAN ETF. After quickly rallying from $100 to $200 during February to May 2009, FSLR has been on the decline ever since and now is on the verge of possibly breaking its major support at $100, which extends several years. At current price around $100, if FSLR cannot make a strong rally, then FSLR will break $100.
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