FAN – Wind Energy ETF Stock Trade Idea

by Olivier on February 12, 2013

Quick post with a beaten down sector trade idea. I have recently charted FAN – First Trust Global Wind Energy ETF as several German listed individual stocks within that sector sparked my interest. FAN would be a diversified approach without exposing yourself to single stock risk. The ETF also makes sense for US based investors who want exposure to wind energy as most of the biggest players are not listed in the US. Top holdings of the FAN ETF:

  • China Longyuan Power Group-H
  • Nordex AG
  • Vestas Wind Systems
  • Iberdrola S.A.
  • EDP Renovaveis SA
  • Gamesa Corporacion Tecnologica, S.A.
  • China WindPower Group Limited
  • Greentech Energy Systems
  • Infigen Energy
  • PNE Wind AG
  • Arise Windpower AB
  • Japan Wind Development Co., Ltd.
  • Theolia SA
  • Eolus Vind AB

Here’s my technical analysis take on FAN.

FAN - First Trust Global Wind Energy ETF Technical Analysis Chart

Up-to date Wind Energy Sector Overview Chart on my public list.

The chart looks like a potential bottom formation. If the stock can take out the 8.00 $ level a conservative measured move completing the inverted head and shoulders pattern would imply a price target around 10 US$. A wider stop loss below the weekly moving average 30 makes sense as it would give the stock enough room to breathe. I have a position in FAN.

Recently I have come across a lot of picture series showing the incredible air pollution levels in China. One series that comes to mind would be the Atlantic’s ‘China’s Toxic Sky. I have no idea how to solve that kind of problem. One thing is for sure though. This is unsustainable and China has to change something as the situation is slowly starting to get out of control in some big Chinese cities. Renewable energy sources could very well be part of the solution.

Es ist nicht gesagt, daß es besser wird, wenn es anders wird. Wenn es aber besser werden soll, muß es anders werden. - Georg Christoph Lichtenberg

Charts: http://stockcharts.com/public/1109839/tenpp

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