Solar stocks are plunging, but 'sell first' mentality creates opportunity for brave investors

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Solar stocks keep plunging Wednesday, with Truist analyst Jordan Levy saying investors are now just selling, without much concern over why they are selling.

Levy added fuel to the selling, by downgrading the shares of residential solar systems installers Sunnova Energy International Inc. NOVA, -1.97% and Sunrun Inc. RUN, -3.75% even after they suffered outsized selloffs, as he still sees no reason to expect a bottom in the near term. Sunnova’s stock slid 2.8% and Sunrun’s stock slumped 4.4%, both toward the lowest closes since April 2020.

Levy said the sector had been suffering broad weakness from recently renewed investor concerns that interest rates would stay “higher for longer.” “While we believe [Sunnova and Sunrun] will continue to take share given their strength in TPO [third-party originator] financing, equity price response post 2Q results makes it clear to us that the market is no longer rewarding outsized growth while companies continue to compete in the ‘land grab’ U.S. [residential] space,” Levy wrote in a note to clients.

Among others in the sector, he still rated the stocks of Array Technologies Inc., Generac Holdings Inc. GNRC, -2.26%, Nextracker Inc. NXT, -2.16%, Shoals Technologies Group Inc. SHLS, -1.52% and SolarEdge Technologies Inc. SEDG, +2.78% at buy, and the shares of Enphase Energy Inc. ENPH, +1.66% and SunPower Corp. SPWR, -1.83% at hold.As Levy said, the “sell first” mentality of investors has created an opportunity for brave investors.

What investors should watch for is what chartists call bullish technical divergence, when the stock hits a new low but the RSI is above its previous lows. That technical condition suggests momentum may have bottomed, leaving bears vulnerable to a counterattack by bulls.

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المملكة العربية السعودية أحدث الأخبار, المملكة العربية السعودية عناوين

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