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February 25, 2022
Oil prices may have backed off from $105 yesterday.
But they could gush again soon.
For one, there’s uncertainty as to what happens next with the war, and its potential impact on oil. Two, there’s growing fear Russia could respond to sanctions by curbing oil exports.
In fact, the Russian government already warned of a “strong” and “painful” response to sanctions, as reported by Business Insider. “Russia’s Foreign Affairs Ministry said the country would target ‘sensitive’ US assets in retaliation,” they added.
While we can always jump into oil stocks on fears of supply curbs, green energy stocks may offer better opportunity at the moment.
“Given the geopolitical events unfolding today that have raised energy commodity prices meaningfully higher (oil, natural gas, power) along with some increased investor belief energy prices may remain elevated it has renewed interest in clean energy stocks like Sunrun,” wrote BMO Capital Markets analyst Ameet Thakkar to Barron’s.
With regards to Sunrun, after finding support around $20, the stock is just starting to pivot higher. It’s also oversold on RSI, MACD, and Williams’ %R. From here, should oil prices gush higher again, green energy stocks, like RUN could see higher highs.
Or, take a look at First Solar (FSLR) – up more than $4 on a volume spike to 2.47 million, as compared to its average volume of 1.34 million just yesterday. Even Canadian Solar (CSIQ) soared about $2.50 on a volume spike to 1.14 million shares.
In short, when there’s less certainty about oil, renewable stocks become far more attractive.
The Dow is up down another 155 points to 32,999
The S&P 500 is down 20 points to 13,905.75
The NASDAQ is down 60 points to 13,906.50
Gold prices are down $6.56 to $1,896.94
Bitcoin is up 11% to $39,309.99
Oil prices are up 59 cents to $93.40
The VIX is down slightly to 30.49
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