Solar Stocks Are Shining Again After a Long Chill

Charts for several solar stocks point to potential gains. (Mario Tama/Getty Images)

Moves in the Invesco Solar ETF suggest a new dawn in the solar sector, which has lagged behind both the broader market and the struggling energy group.

A bull flag, seen on the chart below—a continuation pattern signaling a brief pause before the next move higher—has formed, with a breakout above $39 targeting a measured move to $44. The pattern shows the stock, trading under the ticker TAN, is consolidating a powerful 20% advance achieved during the last week of June and first week of July.

This pattern gains extra weight following a recent breakout above a bullish inverse head-and-shoulders formation, indicating strong potential momentum ahead. Shares were at $40 on Tuesday morning, up better than 4%.

Charts for several solar companies within the ETF point to gains as well. Nextracker (NXT), up almost 70% year to date since going public 2½ years ago, is currently at a critical point on its weekly chart.

After failing multiple times to rise past $60 in early and mid-2024, the stock broke through that resistance in early July. It jumped 14%, turning $60 into potential support.

The stock has gained following each of Nextracker’s past three earnings reports, a positive signal because the next set of results are due after the close on July 29. A move toward $90 by late 2025 or early 2026 is possible; shares were at $ 62.07 near midday.

American depositary receipts of Jinkosolar Holding (JKS), benefiting from a general rebound in Chinese stocks, is holding strong near the $25 level, much better than it did in February and March. It is now hovering around a double bottom pivot at $24.55.

The stock has doubled since early April and is smoothly digesting those gains. Currently trading 37% below its 52-week highs, it still has some work to do, but looks set to grind higher toward the $30 area in the coming months.

Canadian Solar (CSIQ) has surged 29% over the past month. It showed strong relative strength with a 5.3% gain Tuesday, outpacing the Invesco Solar ETF, which rose 1%. The company benefited from a flurry of sales in the first quarter and looks poised for further gains.

The stock bounced Monday, retesting a bullish inverse head and shoulders breakout pivot at $12. Such reversal patterns often signal a potential change from a downtrend to an uptrend. This setup points to a possible move toward $18 by the end of 2025. The stock was at $13.41 on Tuesday.

Write to Doug Busch at douglas.busch@barrons.com