Technical charts for solar energy stocks are showing renewed signs of life, with First Solar Inc. and SolarEdge Technologies Inc. exhibiting bullish patterns that could signal a broader sector recovery. After a steep 75% selloff from its 2021 peak, the Invesco Solar ETF (TAN) is finding support as investors rotate back into the clean energy sector, drawn by improving momentum and long-term demand.
"The chart is beginning to show some encouraging green shoots, with the 50-day simple moving average curling higher for the first time in four months," Doug Busch, senior technical analyst at Barron's Investor Circle, said of First Solar.
First Solar, which constitutes 10% of the TAN ETF, rose 6% on Monday after recapturing its 200-day moving average. The stock is up 22% over the past year and is developing a double-bottom pivot at $251.09. SolarEdge, up 130% over the past year, is forming a bullish falling wedge pattern and has consistently found support at its 200-day moving average.
The positive technical indicators for these key solar stocks could attract significant capital flow into the sector, potentially leading to a sustained rally if the stocks break through identified resistance levels. For First Solar, a move toward $350 by early 2027 would imply a 50% upside, while analysts see a potential 55% upside for SolarEdge to $65 by the end of the year.
First Solar recently reaffirmed its 2026 outlook, projecting module volume of 17.0–18.2 GW and net sales between $4.90 billion and $5.20 billion. This guidance, coupled with a strong first quarter that saw sales of $1.04 billion and net income of $346.62 million, provides a fundamental underpinning to the bullish technical picture. The company's performance has led some analysts to project a fair value of $281.65 for the stock, representing a 31% upside from its current trading price of around $230.
The stock's recent strength is supported by a bullish Moving Average Convergence Divergence (MACD) crossover in early March and a morning star candlestick pattern that completed on March 9, indicating a potential reversal of the prior downtrend. Attention now shifts to the $251.09 double-bottom pivot, a key level that could confirm the new uptrend if breached.
SolarEdge Technologies has also displayed constructive technical behavior. The stock has been consolidating within a bullish falling wedge pattern against the TAN ETF, suggesting it may outperform its peers. While a recent attempt to break out of a bull flag pattern near the $50 level was rejected, the stock remains above its long-term 200-day moving average. Analysts suggest entering the stock at current levels around $40 and adding to the position on a reclaim of the $44.53 cup with handle trigger.
The renewed investor interest in solar stocks comes as the sector benefits from long-term demand for clean energy, which has been further supported by higher crude oil prices. As companies like First Solar and SolarEdge continue to execute on their manufacturing and sales plans, the recent bullish chart patterns may be the first signs of a more sustained recovery for the industry.
This article is for informational purposes only and does not constitute investment advice.
