Some of the best opportunities can be found in ridiculously beaten-down stocks.
Look at First Solar (SYM: FSLR), for example.
The only reason it dropped recently was because of the first debate with Trump and Biden. The idea was that if Trump were to win another term, green energy stocks could suffer.
However, according to Morgan Stanley:
“Analysts led by Andrew Percoco see full-scale repeal of the Inflation Reduction Act as unlikely even in a Republican sweep, but trimming or partial repeal is possible, with a key focus on electric vehicle tax credits and direct pay,” as noted by Seeking Alpha.
“Morgan Stanley sees domestic manufacturing, nuclear power, and wind and solar tax credits enjoying bipartisan support, reducing the risk of repeal regardless of administration composition, with no change to the IRA or the pace of clean energy development under a unified Democratic government or a divided government with a Democratic president.”
In addition, after plummeting following the presidential debate, FSLR appears to have found strong support. It’s also starting to pivot from over-extensions on RSI, MACD and Williams’ %R. The last time it became this oversold, it bounced from about $140 to $300.
The latest weakness on a ridiculous argument is an opportunity to buy on the cheap.
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Written by Ian Cooper