The right way to play the oil "bounce"

"Turn your face to the sun and the shadows fall behind you."
Maori Proverb

As one should have expected oil and other commodities have staged a short rebound over the last several days, and while I still think oil will end the year lower, I couldn't resist to take a part in this "inevitable" bounce- what goes down so quickly has to go up for a little while :) Remember the "dead cat bounce" analogy- given how fast commodity stocks fell in July/August, it is a logical outcome for them to stage a short term bounce even if long term they are still poised to go lower...

I pointed out in numerous articles already -in my opinion, commodity stocks as a group have topped out in early July and now the new long term direction is down. Because of that, it is highly unlikely (not impossible :)) that I will buy O&G stocks outright in the nearest future. But as my trades from last week's article on MSN should have shown (due to production issues article got posted but trades did not), I have grown increasingly interested in solar stocks as an alternative way to play high energy prices.

Some might ask "Heh? "Isn't alternative energy all one big fairy tale"? My answer is "not so fast"- regardless of where the oil prices ends up in the short/medium term, I think we as a nation have finally gotten a message loud and clear- anything (except ethanol) that can get us of the "oil addiction" is a good thing. Wind and solar are the logical way to go...

Vad has always been cold on solar energy... but now he's looking at the sector again in this blog post.

by The Freshman |  08/22/08  |  Stocks: CSUN, CY, FCL, FSLR, JASO, LDK, SPWR, STP, VO,