3 Solar Shares To Purchase Now For Future Political Gridlock

solar stocks - 3 Solar Stocks To Buy Now For Future Political Gridlock

Wall Street announced a winner in the US election this week. But when it comes to solar stocks and today’s charged political environment, the vote was less critical and sometimes even derisive. Let’s look at three players whose price charts and option strategies get them to buy solar stocks – without getting burned.

The President won’t admit. This is the latest news as Biden just barely takes the lead in Pennsylvania and Georgia. But did anyone expect less after four years? Probably not, and by and large, investors haven’t blinked.

The S&P 500 rose this week by more than 6.50% and since the correction low last Friday even by 9%. And market leader out Apple (NASDAQ:AAPL) to Zoom video (NASDAQ:ZM) have focused heavily on the prospects of an ineffective White House being challenged to dismantle Trump’s more popular market policies. Call it the Biden Gridlock Tour if you will.

Despite the popcorn political theater for the Oval Office, Congress is decidedly split between red and blue politicians in the House and Senate. To that extent and beyond cheap corporate tax breaks, relaxed environmental standards will also remain a legacy of the Trump administration. At the same time, every glimmer of hope for a Green New Deal was poured over. Grid, grid, that’s bad for solar stocks, isn’t it? Maybe not.

  • First solar (NASDAQ:FSLR)
  • Sunrun (NASDAQ:RUN)
  • Enphase Energy (NASDAQ:ENPH)

What Can a Solar Stock Investor Do? The suggestion is to look at the world around us and our many greener neighbors. Also acknowledge the many individual states, companies and families in our country who, despite the federal government, continue to advocate alternative energy practices. Then consider the following three well-positioned solar stocks to buy with risk-adjusted strategies to capitalize on this secular trend with greater authority.

Buying solar stocks: First Solar (FSLR)

Source: TradingView charts

The first of our solar stocks we buy is First Solar. The largest PV module maker in the Western Hemisphere kicked it out of the stadium last week with solid Q3 results and backed the report with an optimistic visibility of the guidelines through 2021.

Investors responded with stocks rising more than 13%. And if the FSLR price chart has a say, the future looks even greener for today’s investors.

Tech-wise, this solar stock’s upside response has solidified a recent monthly chart change about its major pattern overload over the past six years. The interpretation is that the third time is the stimulus for bullish FSLR investors, with 20 seconds on deck after two corrective breakouts in 2016 and 2018.

Preferred exposure to solar stocks: Long FSLR March $ 100 / $ 120 bull call spread.

Sunrun (RUN)

Sunrun (RUN) corrective floor pattern is taking shape

Source: TradingView charts

The next share of our solar stocks is Sunrun. RUN stock was an early high-flyer this summer compared to its peers. And the conditions look good so that this run can continue into the next year and beyond.

An announced buyout of Vivant Solar, which will make Sunrun the largest solar installer in the market, and optimism that the company will improve its financial condition by investing in virtual power plants, saw shares soar more than 175% from July through September fast. And as recently expressed here at InvestorPlace, the best could still come.

Technically, a significant correction appears to have been completed. Stocks are currently at a low point in oversold, higher volume that is engulfing the weekly candlestick pattern supported by this week’s earnings topper. Full weekly pattern and stochastics confirmation will have to wait until next week, but in our view the bullish moving intentions of RUN look good right now.

Preferred exposure to solar stocks: Long RUN February $ 65 / $ 75 bull call spread.

Enphase Energy (ENPH)

Enphase Energy (ENPH) short cup breakout

Source: TradingView charts

The last of our solar stocks we buy is Enphase Energy. The large-cap solar inverter maker shares were down nearly 375% since January and 570% over the past 12 months. A recently released spotty earnings report as well as today’s Biden Gridlock Tour could have easily and effectively put an end to the friendly price trend, but they didn’t. Not only should this be respected, it is now a price action worth buying into.

Technically, the weekly price chart shows that ENPH broke from a slightly short cup-shaped base to an all-time high in Thursday’s session. Since this solar stock is still less than 5% after a beautiful purchase decision and today’s market environment is heating up, a vertical spread is an excellent way to use capital more strategically.

Preferred exposure to solar stocks: Long ENPH January $ 125 / $ 140 bull call spread.

At the time of this writing, Chris Tyler has no direct or indirect positions in any of the stocks mentioned in this article.

Chris Tyler is a former ground based derivatives market maker on the US and Pacific exchanges. The information offered is based on his professional experience, but is intended for educational purposes only. The use of this information is 100% the responsibility of the individual. Follow Chris on Twitter @Options_CAT and StockTwits for more market insights and related considerations.


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