A nice sound rounding base for solar?

I want to be bullish on solar. It seems obvious to me that in the not so distant future the cost of solar cell technology will drop enough as efficiency rises to make it the cheapest, and not to mention cleanest, source of energy. In the last energy bubble solar came close to competing without government subsidy (cost parity was effectively reached with natural gas at the peak by FSLR). I personally believe that the next leap forward for civilization (following the internet boom) will come cheap distributed energy provided by photovoltaics. Thus, I keep a close eye on the sector in the expectation that when the day comes for solar, the winning companies will see their stocks increase by orders of magnitude. Ok, enough of the anticipatory irrational exuberance, what do they look like today?

Well, not so great to be frank. Solar has underperformed the market in 2009 and as a whole is basically flat on the year. The sector is very mixed but I find that the ETF TAN is a good way to follow the industry trend. In the seven month chart above you can see that similar to JASO, the industry has been forming a wide rounding base. While TAN seems to be having difficulty getting any traction upwards, there is a series of higher lows and higher highs in place. Clearly, in order for this trend to continue TAN needs to take out $10.77 relatively soon. A break of $11.67 would be *big time* and target $18.69. I like how TAN has found support at its 200 dma for the past six months or so consistently (plus or minus a few days).

SPWRA is a stock that I bought last week in the sector but I'm not feeling so hot about right now. I picked it up after what I perceived to be an over reaction to accounting issues announced last week. The stock was down about 25% in two sessions and it seemed like a good value to me given their leadership in the single crystal silicon PV market. That being said, take a look at this beautiful bear of a long term chart:

Yikes! I think theres a good chance SPWRA is just washing out long term holders here given the volume last week and the severity of the break. But... this stock was at $165 in 2007 and aside from the global recession and a decline in energy prices nothing fundamental has gone wrong with this company (well and some recent, minor, accounting issues). I mean, many would argue that this company is the blue chip of the solar space. For the cheapest lower efficiency thin film PV its FSLR, but for the high efficiency single crystal PV its SPWRA. However, given the chart, I will have a very short patience with it. In the absence of a sharp rebound in the next week I'll be out and might even try a short. The chart is suggesting a price target in the $10 range.

Disclosure: I own JASO and SPRWA shares.