The lure of solar energy is easy to see. It's clean and safe. You grow your own and don't have to rely on unstable or unsavory political regimes for supply. All you need is a nice sunny day.
The catastrophe in Japan serves as a serious knock against nuclear power.
This is a crucial development to the solar industry, which relies on government subsidies.
The market now and then focuses on solar power and has sent those stocks flying over the years. For now, solar is an out-of-favor group, ranked a lowly 174th out of the 197 industries tracked by IBD, as of Thursday's edition.
China, where raw inputs are in big demand, is home to a bevy of solar power firms.
Oddly, the most attractive of the bunch may be Trina Solar (TSL), a company that finds nearly all its customers in Europe.
Trina has a reputation as one of the low-cost leaders in the group. With the field of players growing fast, this should be a crucial edge.
Like all solar stocks, Trina has shown some wild swings since its initial public offering in December 2006.
In the past six months, Trina's action started to tighten up, a sign that institutions were starting to build positions in the firm.
Following a failed breakout in February, Trina is forming a base with a potential buy point at 31.18. The pattern, though, has more distribution than accumulation.
Trina had scored triple-digit earnings gains for four straight quarters through Q3. In Q4, it upped earnings by 83%. Sales surged at least 100% in each of the four recent quarters.
Jinko Solar (JKS), another low-cost leader in the field, makes wafers, solar cells and modules.
At a conference sponsored by Roth Capital Partners two weeks ago, a Jinko executive said that, unlike many of its rivals, the company had not locked in prices for polysilicon, a key ingredient.
This is risky because polysilicon prices are volatile and have been soaring. But Jinko is betting that its well-known efficiency will make it a survivor and that polysilicon prices will fall.
For now, Jinko's scenario does not show up in its stock chart. Trading is still loose and sloppy. Jinko lacks Trina's institutional sponsorship.
Jinko is 35% off its 52-week high. Trina is just 5% off. And Jinko is nowhere near a buy point.
Jinko's profit and sales records are, if anything, even stronger than Trina's. Is this enough reason to forgive the chart flaws? No.
LDK Solar (LDK) is putting up excellent sales growth. Quarterly profits were compared against year-earlier losses for three of the past four periods. Very little sponsorship appears. The chart is sloppy; the stock is mired below its 10-week line.
ReneSola (SOL) looks much like LDK: booming sales growth and a sloppy chart.
ReneSola is just now regaining its 10-week moving average, but remains 32% off its high.
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