Oversold Shares of SunPower Ready to Bounce

Oversold shares of SunPower (SPWR) is a buy.

After crumbling from about $28 to $17, the solar stock appears to have caught strong double bottom support. It’s also starting to pivot from over-extensions on RSI, MACD, and Williams’ %R.  From a current price of $17, we’d like to see it refill its bearish gap around $22. Helping, Susquehanna initiated coverage of the stock with a price target of $25.

“Solar installations are on track to increase about 26% this year,” analyst Biju Perincheril says.  “We expect demand growth to reaccelerate starting in the back half of next year, driven by the benefits associated with the recently enacted Inflation Reduction Act.”

And, as noted by TheFly.com:  Despite “near-term frictions” from higher equipment and financing costs, supply chain constraints, and utility interconnection delays, residential solar demand “remains very strong.” The analyst thinks the risk/reward in residential solar installation names “looks attractive” with the recent weakness and Inflation Reduction Act “tailwinds for the sector.” He expects SunPower’s residential systems and component sales to grow at nearly two-times the market over the next three years.

SPWR last traded at $17.  Again, we initially want to see a test of $22.