But the renewed interest in ethanol proved to be short-lived, as oil retreated back below $20 a barrel just four months later. As a result, many of those smaller ethanol companies within the alternative energy market couldn’t survive.

Flash forward to today, where we’ve seen crude oil prices double in just the past four months. Worldwide oil demand has soared, particularly from fast-growing countries like China and India, and although the global downturn has seen the pace of demand slow, the global economy gets back on track, it should prove even more bullish for oil.

But there’s another sector that should rise, too…

Viable Alternative Energies: The Clean Energy Tracker

With oil prices rising again recently, it’s sparked yet another conversation about the viability of certain alternative energies.

One ETF that tracks the performance of clean energy firms is the PowerShares WilderHill Clean Energy(NYSE: PBW) – a widely traded vehicle that gives you exposure to this still-growing sector in a safer way than investing in individual companies.

While firms like Exxon Mobil (NYSE: XOM) rake in billions of dollars per quarter from oil, PBW invests almost entirely in experimental, technology-focused “green” companies. And while these guys stand to benefit from higher oil prices just like specific oil companies, their success depends more on regulatory changes, subsidies and a global recognition of the need for alternative energy solutions.

The Government Is Helping… But This Industry Still Faces A Battle

When it comes to the alternative energy market, wind, solar, hydroelectric, geothermal, and nuclear power have all received attention over the past couple of years.

But when the oil market first began its march towards record high prices, it was the ethanol industry that took center stage and triggered the wider debate over cleaner energy resources.

However, the ethanol market faces a battle. Despite the government’s intervention and subsidies for the industry, newer technologies are needed in order to make ethanol more viable – and the industry’s companies profitable. A good example is Pacific Ethanol (NASDAQ: PEIX) – a company that Bill Gates invested heavily in a few years ago, paying $12 a share. Today, the stock trades for just 40 cents.

Below is a daily chart of PowerShares WilderHill Clean Energy (NYSE: PBW), which is currently at a critical juncture.

Three Scenarios For The Clean Energy Fund

As you can see, when the stock market bottomed out in March and oil prices retested their lows, PBW did the same.

Since then, however, PBW has doubled off those lows to the June 10 high of $11.37. This is right around the swing high of $11.40 that it tested back in November before it pulled back to the trendline drawn off the March lows.

In addition, the 50-day and 200-day moving averages are very close to crossing one another – a development that sometimes indicates a short-term top.

So what we have here is a relatively clear-cut conclusion…

• A close above $11.40 would be bullish and should lead to higher prices.

• However, a close below the trendline, currently around $10, would be bearish over the short-term.

• A close or two below the 50-day and 200-day moving averages, which are currently around $9.50, could lead to a move down to $8 or lower.

Source: The Alternative Energy Market: Bullish & Bearish Scenarios For NYSE: PBW

Wait, that can’t be right, but I guess it is. Pacific Ethanol (NASDAQ:PEIX) fell 28% in the first moments of trading, with nothing but good news on the reports.

PEIX spiked to $2.08 late yesterday (pretty close to 4:30 p.m.), but the stock fell to $1.80 at open. And it’s currently around $1.63. That’s 28% down from Monday’s ebullient close.

The company’s Port of Stockton plant just came online, which means Pacific Ethanol will be making another 60 million gallons of ethanol in the next year, bringing total production for Pacific Ethanol up to 220 million gallons per year.

This should have been good news, enough to send the stock up significantly, and it did, if you look beyond yesterday’s overly jubilant closing price. Monday’s open price was only $1.36, meaning the stock has gained a nice 20%, despite the depression of the overall markets.

The reaction today wasn’t a statement about ethanol producers. Although investors are starting to question the profits available to alternative energy producers in a recession, but that can’t explain a pop this high. Pacific Ethanol’s spiking was simply an excited correction in an extremely volatile market.

Source: Pacific Ethanol (PEIX) Down 28% in First Hour

Quarterly earnings tripled for Chinese solar maker LDK Solar (NYSE:LDK) on soaring demand for solar power, while ethanol producer Pacific Ethanol (NASDAQ:PEIX) reported a wider-than-expected loss on surging corn prices.

J. Christoph Amberger in Today’s Financial News says these results create a great opportunity for investors. Yesterday, shares in LDK Solar rose 15 percent. And J. Christoph reckons solar maker ReneSola (NYSE:SOL) may now do the same…

LDK Solar apparently is coping quite well with the proposed loss of German subsies. The company reported Q2 revenues surging 89.2% to $441.7 million after total wafer shipments increased 60.8% during the quarter. Gross margins ended up at 25.4%. (Obama, are you listening?! Can you spell “windfall profits”?)

LDK expects revenues between $486 million and $496 million on shipments of between 210 megawatts and 220 megawatts of wafers in the third quarter: “The company also lifted its full year guidance to between $1.65 and $1.75 billion compared to between $1.08 and $1.18 billion earlier.”The stock is still trading well below its 52-week high of $76.75. The stock gained over 17% today.

While most other publicly traded solar companies were gaining today, one in particular stood out: RenaSola another Chinese wafer maker, announced that it would report unaudited Q2 financials on Tuesday, Aug. 19, before the market open. The stock gained over 11% to trade at $15.36.

Call me crazy, but those earnings just might be something!

We’ll play: Buy RenaSola between $15-16 in view of an earnings-induced bounce of another 20% by next Tuesday.

Source: ReneSola is Our New Solar Earnings Speculation

• Lowe’s Cos. Inc. (LOW) coughed up a rough first quarter, reporting a 18% decline in profit as the declining U.S. housing market and weakened dollar cut customer spending. The No. 2 home-improvement retailer in the United States also lowered its full-year outlook and revisiting plans for store expansion, MarketWatch reported.

• Billionaire investor Warren Buffett told AFP that he’s backing Barack Obama for the presidency. Buffett said he’d offer support to either Obama or Hillary Clinton, but leaned in favor of the Illinois senator. “I will be very happy if he is elected president,” Buffett said.

• Microsoft Corp. (MSFT) is once again trying to team up with Yahoo Inc. (YHOO) though the renewed talks have not yet escalated to another takeover attempt. The Associated Press reported that discussions were revived Sunday, but Microsoft refused to offer up any specifics about the nature of the deal being explored except to say it involved bolstering the companies’ position in the online search and advertising markets.

• Office supplies retailer Staples Inc. (SPLS) yesterday (Monday) launched a hostile $2.34 billion bid for Corporate Express NV (CXP), as the Dutch office supplier was unwilling to negotiate, Reuters reported. Corporate Express rejected Staples’ $12 (8 euros) a share offer last week saying it significantly undervalued the company. Based on 182.848 million Corporate Express shares outstanding, the equity value is worth $2.26 billion (1.46 billion euros). Including net debt, the value is $4.3 billion (2.8 billion euros), Staples said.

• News Corp. (NWS) said yesterday (Monday) that it raised its stake in Premiere AG, a German pay-TV operator, to 25%, the Associated Press reported. News Corp., which previously owned 22.7% of the company, has been increasing its stake in Premiere since January, when it bought a 14.5% stake the from cable operator Unitymedia. Premiere has more than 4 million subscribers in Germany and Austria.

• Video game maker Take-Two Interactive Software Inc. (TTWO) once again rejected rival Electronic Art Inc.’s (ERTS) $2 billion hostile takeover offer. Due in part to the strength of Take-Two’s release of Grand Theft Auto 4, management recommended that shareholders not accept EA’s offer, Reuters reported.

• Pacific Ethanol Inc. (PEIX) shares more than doubled yesterday (Monday) as first quarter results beat expectations. The ethanol producer lost $35.2 million, or 90 cents per share, compared to earnings of $3 million, or 5 cents per share, for the same period the year prior, The Associated Press reported. But if not for a one-time charge of 96 cents, the company would have posted a first-quarter profit of 6 cents per share. Shares gained $1.94, an increase of 60%, to close at $5.14.

• Shares of for-profit education firm DeVry Inc. (DV) dropped yesterday (Monday) on news that the federal government is investigating the firm’s recruitment policies, The Associated Press reported. DeVry stock shed $2.47, a 4.36% decline to close at $54.20. DeVry has pledged to cooperate fully with the investigation.

Source: Global Investing Roundups: Tuesday, May 20th, 2008