Even on a down day for U.S. stocks,  the Guggenheim Solar ETF (NYSEArca: TAN) managed to notch another up day.  And it was not just any up day.  TAN jumped 3.1% on almost two and a half times the average daily volume to a split-adjusted all-time high on a day when the S&P 500 lost 0.6% and the Dow Jones Industrial Average suffered a triple-digit loss.

The solar industry has shined bright this year, providing a sharp contrast to the sectors underperformance last year. Demand for photovoltaic cells is rising, with the Chinese government stepping up to help this fledgling industry and that has helped make TAN the top-performing non-leveraged sector ETF this year. TAN gained over 43% in just the third quarter. [Q3 ETF Performance Report]

Even with its stellar run, the technical outlook for TAN is encouraging.  TAN is up 13.2% in the past week,  but could offer significant upside from here as some traders think the ETF could run to $40, helped by stocks like Elon Musk’s SolarCity (NasdaqGM: SCTY), First Solar (NasdaqGM: FSLR), Trina Solar (NYSE: TSL) and Yingli Green Energy (NYSE: YGE). [Solar ETF Aims for All-Time High]

But why stop at $40 when TAN does not have to? TAN could go much, much higher than that. “If the solar ETF can move above resistance from twin highs set in 2011 and 2012, there would be little in its way to getting back to the $88 level. That was where a long sideways range fell apart, sending the stock tumbling toward its final low. For those keeping score: That would be more than a doubling from today’s trading,” reports Michael Kahn for Barron’s.

Kahn notes that Trina solar and Yingli Green re two of the stronger stocks in the solar sector on a technical basis.  Deutsche Bank last week raised its price target on Trina Solar to $18 from $11.50 and its price target on Yingli Green Energy to $8 from $5. Those stocks are two of TAN’s seven largest holdings combing for about 10% of that ETF’s weight. [Solar ETFs Get More Good News]