The IBD Stock Of The Day is the exchange-traded fund Invesco Solar, which contains a bundle of stocks in the hot and getting hotter solar energy field. IBD's SwingTrader recently added TAN stock to its list of companies.
Solar companies in the TAN ETF include First Solar, Enphase Energy, SolarEdge Technologies, Sunrun, Daqo New Energy, JinkoSolar and SunPower. Several of these stocks became the subjects of profile in the IBD Stock Of The Day feature.
Solar stocks have gotten a boost by the massive green energy bill, the Inflation Reduction Act, recently signed into law by President Joe Biden. The legislation unlocks $370 billion for clean-energy incentives and consumer benefits.
The bill has led to solid gains for some solar stocks being in the right place at the right time, such as First Solar and Enphase. But others have not gained as much traction, such as Daqo, Sunrun and JinkoSolar.
Benefits Of Invesco Solar ETF
While the leading stocks in the solar space see healthy gains, it's also easier to get shaken out or left open to uncomfortable losses. The Invesco Solar TAN ETF, by contrast, has less volatility but can still have big moves. For example, TAN stock tripled in price in 2020.
Over time, tariffs, geopolitical tensions, supply-chain woes and raw material costs have buffeted solar stocks.
As a result, green-energy indexes and funds like Invesco Solar historically trade based on short-term expectations, which makes TAN stock a good candidate for IBD's SwingTrader.
But investing in ETFs helps reduce portfolio volatility.
Solar Energy Stocks Having A Good Day
On Wednesday, Sept. 7, SwingTrader said it added TAN as a full position, as the ETF finds support near the 50-day line, breaking a recent downtrend. TAN stock also retook its 21-day moving average, breaking a recent downtrend and continuing its bounce above the 200-day moving average.
The TAN fund has a large weighting in key players in the solar field, including Enphase Energy, First Solar and SolarEdge. Those stocks were up markedly Wednesday.
First Solar climbed 5.6% to close at 134.80 on the stock market today. Enphase surged 8% to 316.31, while SolarEdge jumped 11.9% to 311.37.
Canadian Solar gained 5% to 47.01, while SunPower vaulted 14.2% higher to 27.37 and Sunrun soared 10.5% to finish at 36.58.
As a result, TAN stock climbed 6.2% Wednesday to close at 87.42.
Solar Energy Group Is No. 1
IBD's Energy-Solar industry group rates No. 1 out of 197 tracked. IBD industry groups are a combination of companies in the same business.
Daqo New Energy leads the group, followed by Enphase, Canadian Solar, JinkoSolar and then SolarEdge.
The solar energy bill that signed into law is the largest federal government spending increase on alternative energy in U.S. history. Further, its impact could last over the next decade.
A goal of the act is to strengthen energy independence, reduce dependence on Chinese imports, and reinvigorate the industrial sector. It also aims to create American jobs and accelerate the transition to renewable energy.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
