Solar stocks continued to perform well this week, though it was a sleepy week for the solar industry overall.
The market was still trying to figure out what the Chinese government plans on doing with its subsidy. On the off chance that it will implement a decent subsidy, Chinese solar company stocks were up for the week. Of course, the market at large was up for the week.
More interestingly, though, the Claymore/Mac Global Solar ETF (TAN) turned in the second best performance of any ETF for the month of March. It gained 29%. (The numer one ETF was the iShares MSCI South Korea (EWY) which gained 31%.)
As you can see in the chart above the TAN was up large in the past 30 days, outpacing the Dow and NASDAQ by quite a bit.
Will it repeat its performance in April? We doubt it. There will be a lot of earnings releases in April. While we only see Evergreen Solar (ESLR) reporting from the solar sector, lots of bigger companies like GE, Google, Goldman Sachs and so on will report.
It’s hard to believe the first quarter delivered much in the way of great news. If those companies go down, they might drag the solar sector with them.
Additionally, many analysts were negative on solar companies throughout March. Investors ignored that to plunge into Chinese solar companies on the assumption of juicy subsidies. If they wake up in April to the underlying problems that still exist–oversupply from weak demand–then it could spell trouble.
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