The iShares Global Clean Energy ETF (Nasdaq:ICLN) and the Invesco Solar ETF (NYSEarca:TAN) – two of my top ETFs for the year – turned in negative performances last week.
As an investor, you may be wondering if now’s the time to start moving away from the clean energy sectors of the market…
But I’m here to tell you that that would be a big mistake.
The drop is simply what I like to call a “herding cats market.” We’re seeing correlation drop in the sector over the short-term, which is really just a fancy way of saying that the sector isn’t moving together – kind of like what would happen if you tried to herd cats.
Instead, you’ve got a handful of stocks rallying to new highs while others are selling off.
Below, I’ve put together an alternative energy watchlist. This chart breaks down the weekly performance of the larger companies in each these two sectors:
Note the difference between the top and bottom performers. The wide range in this sector indicates the volatility within these stocks.
You know what that means, right?
Volatility in a bullish sector means there are opportunities to be found. You just need to take a closer look at the stocks at each end of the spectrum.