Investors are a fickle bunch.
One week they’re in love with renewable energy, the next week they’re quoting some big-shot analyst who insists that oil will fall back down to $30 a barrel . . . and that anyone in the alternative energy market’s about to get squashed.
It would almost bother me if it weren’t for the fact that this kind of behavior tends to serve as an excellent indicator for trading in this sector.
For instance, it was only a few months ago when those mouthpieces on television were shunning solar as if it were the most useless market out there.
Meanwhile, savvy traders were loading up . . . and gearing up for some of the quickest and most profitable gains I’ve ever seen in this market.
Just take a look at some of these solar stocks, all of which have delivered some quick and insanely profitable trades since the start of the year.
Hoku Scientific (HOKU:NASDAQ)
First Solar (FSLR:NASDAQ)
Trina Solar (TSL:NYSE)
Evergreen Solar (ESLR:NASDAQ)
Of course, there are still naysayers insisting that this is just a temporary fluke.
Though Washington and the market beg to differ!
This Ain’t Tree-Hugging!
Introduced in the House as HR 550 and the Senate as S 590, the “Securing America’s Energy Independence” Act would enable solar energy to become more affordable across the country. And in many states it would actually end up being cheaper than buying electricity from the grid.
Essentially, the bill extends the 30% federal investment tax credit for another eight years, modifies the distributed photovoltaics incentive to $1,500 per half-kW of capacity and removes the $2,000 residential cap.
What does all this mean?
It means that these temporary financial incentives will enable the solar industry to build economies of scale by giving it the certainty it needs to make long-term investments.
What was once shrugged off as tree-hugging nonsense becomes a competitive industry with the ability to clean up the environment . . . and make us a lot of money!
This legislation was introduced on January 18, 2007.
Since then, solar stocks have been flying.
And the best part is, this is only a preview.
If this thing gets passed - and I don’t see many politicians voting against it, as most want to keep their jobs - you’re going to experience one of the most impressive bull markets ever seen in the energy sector.
Long-term Green Chip investors are going to ride it for everything it’s worth.
And short-term traders are going to be extremely busy capitalizing on short-term trading opportunities that have already delivered more gains in the past two months than a lot of other traders will make all year.
Either way, if you’ve been waiting for an opportunity to grab a bit of solar, now’s the time to do it.
Jeff
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