Market Insights

Remember solar stocks? They’re quietly screaming higher.

PowerShares Solar Energy exchange-traded fund (TAN) is up 14 percent since the end of October. That outpaces every other major portfolio on our Market Action dashboard and puts the industry on pace for its best month in three years.

The main catalyst seems to have been pro-solar Democrats winning some big governors’ races in the November 6 mid-term elections. There are lesser hopes of action from Washington after the Democrats won the House of Representatives, but most industry watchers expect action at the statehouse level.

Aside from that political catalyst, individual companies have reported mixed news.

SunRun (RUN) chart with 50- and 200-day moving averages.

First Solar (FSLR) fell in late October after revenue missed guidance. But now it’s turned around in November. SunRun (RUN) also tried to drop following bearish news on November 7. It also bounced immediately and is now fighting its way higher.

As an aside, the way these two have rallied on bad news is consistent with a pattern of investor rotation. Click here for more.

Other headlines have been more positive. Canadian Solar (CSIQ), for instance, reported profit and shipments at the high end of guidance. JinkoSolar (JKS) also surprised to the upside. Separately, press reports suggested China may raise its target for the use of solar power in 2020.

In conclusion, most clients likely forgotten about solar stocks because they’ve been dead for years. But the price action has improved sharply this month as investors start to price in new information. Now could be the time to check out this group again.