Could the Clouds be Lifting on Solar Stocks?

For solar stocks, it’s been a case of sunrise and sunset for the past several years. Unfortunately, 2010 has been much more a case of sunset than sunrise with several previous winners laboring under gray skies. This includes Energy Conversion Devices (NASDAQ: ENER), industry-giant First Solar (NASDAQ: FSLR) and Suntech Power Holdings (NYSE: STP). Of course, other high-profile solar stocks have shone in 2010, with big gains for GT Solar International (NASDAQ: SOLR), JA Solar Holdings (NASDAQ: JASO) and RenaSola (NYSE: SOL).

These stocks represent the extreme losers and extreme winners in the space, but Exchange-traded funds (ETFs) pegged to the solar industry such as the Guggenheim Solar ETF (NYSE: TAN) and the Market Vectors Solar Energy ETF (NYSE: KWT) both are deep in the red this year. TAN is down -27.42% year to date (as of 12/9/10), while KWT has fallen -27.40%.

Yet if we look at the chart below of TAN, we can see that after falling to its November low, the fund actually has fought back nicely. And while TAN still trades below its 50- and 200-day moving averages, the most recent price trend in the sector shows that perhaps the clouds are starting to lift. (more)