Slowly but surely, solar stocks began their rise from the ashes way back in August 2018.
That was in part thanks to Daqo New Energy (DQ).
Not only did the company post stronger than expected earnings with EPS of $1.36, beating estimates for 94 cents, it beat revenue estimates by 6.78% with $66.95 billion.
However, it wasn’t just its earnings that brought out the solar bulls.
2019 was a great year for solar stocks, and they continued to surge upward.
2020 showed a brief hiccup during the COVID scare, but have rebounded nicely.
2021 marks the start of a new administration committed to pursuing clean energy alternatives.
Since Election Day, DQ ran from $35 to $117.
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Company comments on the solar sector did a fine job of that. In fact, the company cited strong demand for solar energy outside of China as the main catalyst for the rebound. Specifically, it pointed to stronger demand in Latin America, India, the Middle East, Europe and the U.S.
It also noted that with recent price declines, global solar installations could rise to 120-140 gigawatts in 2019 and 140-160 gigawatts in 2020, up from 95-105 gigawatts this year. Better yet, the outlook for solar energy demand in China is being underestimated by many, Daqo says.
Demand for solar energy will be strong there because of the declining cost of solar modules.
While some investors are exiting the solar trade, the bullish view is based on the fact that solar power is here to stay. We have to remember the global solar market is rapidly growing in countries around the world despite the hesitancy of the White House to endorse climate accords.
We also have to consider that in many cases, the selling pressure is cooling off.
Technically, back in August 2018, many solar stocks were slow-motion train wrecks.
The Invesco Solar ETF (TAN) for example had just slipped from $27 to $25.
First Solar (FSLR) gapped from $79 to $52. Canadian Solar (CSIQ) fell from $15 to $12.50.
However, even though many lay in ruin, there is opportunity, especially with the outlook for solar. Given that news, many solar stocks have stopped falling as aggressively, and are beginning to consolidate in a tight coiled spring.
We can see that in the DQ chart above. And we can see it in First Solar.
Since Election Day, CSIQ ran from $37 to as high as $65.
CSIQ has pulled back in the past month but is starting to resume its bullish streak. Further solid solar sector news would help, too.