Solar stocks spike on Tuesday after blistering week

Solar stocks spike as rumor spreads that Senate might do away with cutting solar credits.
Sunrun and SolarEdge both rally more than 18%.
Enphase and Invesco's Solar ETF both surge over 9%.
SolarEdge benefits from the end of Israel-Iran hostilities.

Clay Webster FXStreet

Solar stocks are joining the Tuesday ceasefire rally at the end of a poor period for share prices. President Donald Trump announced a tentative ceasefire late Monday that was immediately broken by both Israel and Iran, but the shaky peace agreement seems to be holding sway as Tuesday's session heads for the home stretch.

Solar stocks crashed on June 17, when it was announced that the Republican budget bill would forgo residential solar credits abruptly, calling into question the entire residential solar model of companies like Sunrun (RUN) and Enphase Energy (ENPH). But on Tuesday afternoon, those stocks have gained 19% and 9%, respectively.

GOP Senator Kevin Cramer told reporters that Republicans are discussing possible changes to the provision in Trump’s spending bill that would phase out rooftop solar tax credits. On Monday, the Senate Finance Committee changed the 60-day cutoff for residential solar credits to 180 days.

The broader stock market did not flinch despite Federal Reserve (Fed) Chair Jerome Powell deriding the need for near-term interest rate cuts. The Dow Jones Industrial Average, S&P 500 and NASDAQ Composite all gained over 1% on Tuesday at the time of writing.

Solar stock charts

Invesco's Solar ETF (TAN) jumped 4.5% on Tuesday after falling 9.2% on June 17. The 200-day Simple Moving Average (SMA) sits about $1 higher at $34.56.

Invesco Solar ETF (TAN) daily chart

SolarEdge Technologies (SEDG) rallied 18.5% on the rumor, but as an Israeli company, the share price also benefited from the shaky ceasefire with Iran. The 50-day SMA has already broken above its 200-day counterpart here, which is a bullish pattern called a Golden Cross.

SolarEdge Technologies daily chart

Enphase Energy (ENPH), known for its inverters, added 9.3% on the sector hype. The stock is still down 45% year to date, however.

ENPH daily stock chart

Always a volatile play, Sunrun stock is leading the industry on Tuesday, surging back to within striking distance of the 50-day SMA for the first time since June 17. Recent support sits at $5.50 for this residential solar installation and lease company, as short-term resistance comes around $10.00.

RUN daily stock chart

Author

Clay Webster

FXStreet

Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.

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