One of the few sectors that looks constructive at this point is clean-energy stocks. It's about the only potential candidate for a stock-market breakout in May.
Intuitively, clean-energy stocks should be in a raging bull market. If there's one clear trend in this world, it's the green movement. Clean-energy stocks certainly did very well in 2013 and the first months of 2014, but lost 50 percent of their value in the 2 years that followed.
That could be changing.
The weekly chart of clean-energy stocks, represented by the QCLN index makes our point. The index started to breakout from a falling bear market trend line at 16.80. However after 2 months of trying to breakout, there's been no follow through to date.
Potential Risk
More than 7 percent of the index is comprised of Tesla (NASDAQ:TSLA), which since February has done exceptionally well. So there is the possibility of a false breakout if Tesla, the index leader, loses steam.
The top-5 stocks in this clean-energy stock index, in terms of weight, includes Tesla, ON Semiconductor (NASDAQ:ON), Microsemi (NASDAQ:MSCC), Hexcel (NYSE:HXL) and Acuity Brands (NYSE:AYI).
The index contains clean energy stocks across several industries, but is focused on industrials, technology, oil and gas and utilities.
