TAN Tumble: Solar ETF Flirting With Danger

Like so many exchange traded funds holding momentum stocks, the Guggenheim Solar ETF (NYSEArca: TAN) has been unable to escape the carnage that has swept the momentum landscape.

Down another 2.6% Friday, TAN has tumbled more than 15% in the past 90 days. Making matters worse is what this week’s 5.4% drop has done to the ETF: Take it below its 200-day moving average for the first time in over a year.

“TAN, the solar ETF, is breaking its 200 day moving average today for the first time since April 2013.  It has been quite a run for the sector, as TAN has gone from $15 in April 2013 to $37.50 today (and that’s down from the $51.07 high in early March),” writes Enis Taner for Risk Reversal.

TAN is being hampered by First Solar (NasdaqGS: FSLR), among other holdings. First Solar, TAN’s largest holding with a weight of 9.3%, is down 8% this week and more than 13% over the past month.

“First Solar actually broke out to a new 2.5 year high on its April earnings report, but the stock has failed to hold that breakout.  That’s actually a familiar pattern for FSLR during the 2 year bull run,” according to Taner.

First Solar is not the only TAN offender. Over the past month, First Solar, Elon Musk’s SolarCity (NasdaqGS: SCTY) and Canadian Solar (NasdaqGS: CSIQ) have fallen average of more than 14%. Those tumbles overshadow the 17.6% by SunPower (NasdaqGS: SPWR). [Solar ETF Wilts on Momo Sell-Off]