ETF Trends
ETF Trends

The Guggenheim Solar ETF (NYSEArca: TAN) is coming off a week in which it lost 5.3%, but the largest solar may not be down and out for long.

At the technical level, the ETF appears to be consolidating, which could give opportunistic, patient buyers a low-risk entry.

“The current base in TAN is the first touch of the 40wma since the strong uptrend began in 2013, which offers a low-risk entry to participate in what should be at least one more significant wave up in solar stocks,” according to Deron Wagner of Morpheus Trading Group.

As the epitome of a momentum play, TAN was punished during the sell-off that afflicted so many high beta stocks and ETFs late in the first quarter and into the early part of the second quarter. TAN’s tumble actually lasted longer than some of its momentum counterparts. From its March 6 peak to its May 20 trough, TAN slid 26.5%, entering a bear market along the way. [A Tumble for TAN]

Since then TAN has surged 14.1% and has reclaimed its 50- and 200-day moving averages.

“The daily chart shows the higher low in place in early June, with the current pullback attempting to hold a strong support level at $40, where the rising 50 and 200-day MAs and prior swing low converge,” added Wagner.

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