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The Parallel Paths of Oil and Solar Stocks

Crude oil is down more than 50% from its June 2014 levels and TAN is down 34% from its 52-week high. The damage appears irreversible, at least in the foreseeable future.  But high oil prices are good for the future because they finance it, in a way.

USO

USO_20150106

USO is down 54% from its 250-day high and at this point a rise of about 86% is required for price to catch up with the 200-day moving average, as shown on the indicator panes of the above chart.

TAN

TAN_20150106_STAT

TAN is down 34% from its 250-day high back in March of last year and for price to catch up with the 200-day moving average it must rise about 21% from current levels, as shown on the bottom two panes of the above chart.

Obviously, reserved and development in alternative forms of energy will slow down or even halted in the price of oil drops to even lower levels. Apparently, high oil prices are good for the future because they finance it and low oil prices offer only short-term gains to consumers.

Things may get a lot worse before they get better in these areas due to the competing objectives of major players.

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Disclosure: no relevant positions.
Charting program: Amibroker
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