There is an interesting pattern taking shape in the Solar Stocks. More specifically, the Guggenheim Solar ETF
$TAN
is breaking out of what could be an inverse head & shoulders
continuation pattern. I first brought up the possibility of this
breakout on
Saturday in a post showing some of the highlights from a long charting session.
This one is pretty standard: In October, the Solar exchange traded
fund ran into resistance in the low 40s. After a brief correction,
prices rallied right back up there in November and rolled over once
again. This time TAN made lower lows into December. After one more rally
and retest of this resistance, prices once again rolled over. As
always, the more times that a level is tested, the higher the likelihood
that it breaks. Sure enough, Tuesday morning Solar stocks broke out to
new highs, finally clearing all of that supply (resistance):
As long as prices hold this breakout, prices should be heading a lot
higher. The measured move based on the size of this pattern takes us
above $50. This target is based on the 9 points between the bottom of
the head and neckline.
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