It's Not Always a Crazy Party

One of the more interesting aspects regarding the spotty summer action we saw in the energy/materials/emerging market complex is that some of the intriguing solar stocks notably slowed down.

We know that solar can often trade with that complex, since higher oil creates more interest in alternatives like solar, and vice versa.

But within the solar sector (TAN is the main ETF), some popular names from yesteryear like First Solar had clearly fallen by the wayside technically, a point we made many times here and for Members. FSLR, along with the likes of SPWR, may have been dogs, but exciting up-and-comers like Sunrun (RUN), SEDG, and VSLR became much more viable as longs.

However, the entire sector cooled off in June and early-July, leading to the last two months or so of corrective action amid the materials/energy/emerging market underperformance. 

It cannot always be a crazy party, though, as much as some traders unreasonably expect it to be. Thus, when we observe the RUN weekly chart, below, we can see the consolidation could easily set up a fresh leg higher. Of all the solar charts I see, RUN continues to be act the best and poses the biggest threat as an emerging sector leader.

First things first, and commodities likely need to firm up a bit, as do materials. But if that happens it will be hard not to look for entries in RUN this autumn after finally correcting an impressive rally throughout the first half of 2018.