Clean Energy Stocks Are Due for a Big Rally
May 21st, 2008 | By Brian Hunt | Category: Oil Investment & Alternative EnergyThe PowerShares Clean Energy ETF (PBW) debuted in April 2005.
With more than $1.5 billion in assets, PBW is one of most popular, diversified ways to invest in solar, biomass, wind, and geothermal energy. Common sense tells us when the holy trinity of fossil fuels – crude oil, coal, and natural gas – rise in price, companies that provide cleaner substitutes should also rise in price.
Today’s chart tracks the ratio between the price of crude oil and the price of the Clean Energy ETF. When the ratio hits around 3 or below, clean energy stocks are popular and soaring. When the ratio moves past 5, clean energy shares are out of favor and lagging the gains made in crude oil.
PBW’s only been around for three years, and this indicator is pretty rough… But with oil approaching $130 a barrel and clean energy stocks out of favor, expect a rally from the “treehugger-approved” companies of the world.
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Source: Clean Energy Stocks Are Due for a Big Rally
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