Mish’s Daily: Has the Solar ETF TAN Bottomed?
Mish’s Daily: Has the Solar ETF TAN Bottomed?
Written by Michele ‘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.
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Mish in the Media
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CMC Markets Follow up on gold, oil, dollar pairs and S&P 500-short term trading with a bias 02-07-24
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Kitco News An Article with Neils Christensen on the direction for gold 01-30-24
Yahoo Finance 33 Charts for 2024 -Article
StockchartsTV How Calendar Ranges can Predict Market Direction-Mish and Geoff cover how this indicator tells you who and what to believe, when to act and what to trade 01-16-24
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
Nasdaq (QQQ) 425 support to hold
Regional banks (KRE) 45 support
Semiconductors (SMH) New all-time high
Transportation (IYT) Now, must hold 266
Biotechnology (IBB) 135 pivotal -like this sector but has more to prove
Retail (XRT) 70 back to near term support
20240208
