Oversold Solar Sector Intriguing

The solar sector was left out of the entire Jan-Mar advance in the major equity market ETFs. However, the chart pattern and the behavior of the Claymore Global Solar Energy ETF (TAN)’s biggest component, First Solar (FSLR), suggest that “this dog” just might have its day yet. The rounded base-like formation that has been established since early February is intriguing technically, within a very oversold condition. Price, however, is everything – and until the TAN hurdled key initial near-term resistance at 8.55, the base will remain just that – a base in development. At this juncture, my work argues that I “need” to be long unless or until the prior low is violated at 7.88.