Broader market momentum is fading, but a group of solar names are bucking the trend and could be charging up for another leg higher.
Momentum Stocks To Add To Your Watchlist
Benzinga's Edge Stock Rankings system assigns scores based on momentum, growth, value and quality. The momentum score is a valuable metric for short-term trading strategies that aim to capture continuation of price trends.
Identifying significant changes in momentum can help traders get ahead of potential changes in general stock direction. Benzinga's rankings system flagged three solar stocks that saw significant swings in bullish momentum over the past week following new guidance surrounding tax credits for clean energy projects.
Array Technologies Inc (NASDAQ:ARRY) experienced the largest week-over-week increase in momentum score, moving from a score of 16.6 on Aug. 11 to a current score of 81.46. Array Technologies shares are up about 48% over the past week, according to Benzinga Pro.
Market structure reveals a series of higher highs and higher lows, confirming an uptrend. The RSI is calculated at 48.50, indicating that the stock is neither overbought nor oversold, but it’s approaching the midpoint, which could signal a potential shift. The MACD is showing a bullish crossover, but the lines are converging, hinting at possible consolidation ahead.
The stock is above its 50-day moving average of $6.95, indicating a bullish trend, while the 100-day and 200-day moving averages are at $6.32 and $6.36, respectively, also supporting this upward momentum. Key resistance is observed near the recent high of $9.21, while support can be identified around the 50-day moving average.
Shoals Technologies Group Inc (NASDAQ:SHLS), a provider of electrical balance of system solutions, zoomed up Benzinga’s Edge momentum rankings last week, moving to 84.98 from a prior score of just 30.85. The leap in momentum comes as shares have rallied about 25% over the past week.
The stock is above its 50-day moving average of $5.32, suggesting a bullish trend in the medium term, while the 100-day and 200-day moving averages at $4.70 and $4.63, respectively, provide strong support levels.
With a market cap of $1.01 billion and a P/E ratio of 51.08, SHLS appears to be valued at a premium compared to traditional benchmarks. The forward P/E of 14.95 indicates a more favorable outlook for future earnings, although the current valuation may deter value-focused investors given its high P/E ratio.
First Solar Inc (NASDAQ:FSLR) also made a strong move in Benzinga’s Edge Rankings last week, moving from a score of 35.43 to a new score of 75.5 after rising about 13% over the past five trading sessions.
The bullish momentum is supported by increased trading volume and positive sector trends. Analyst sentiment also remains positive, with GLJ Research maintaining a Buy rating with a $214 price target on Aug. 12 and BMO Capital maintaining a Buy rating with a $203 price target and Susquehanna maintaining a Positive rating with a $222 price target on Aug. 1.
Benzinga Edge rankings show moderate fundamentals, with Value ranking 61.41/100, Growth ranking 81.77/100, Quality ranking 27.35/100, and Momentum ranking 75.5/100. Overall, the mixed sentiment reflected in the rankings suggests that while growth and momentum are strong, the quality of the stock may be a concern for investors.
Solar Price Action: At publication time, Array Technologies stock was up 1.29% at $9.02, Shoals Technologies was up 1.49% at $6.13 and First Solar shares were down 0.77% at $209.33, according to Benzinga Pro.
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