Investors who want to avoid oil stocks in the wake of BP's (BP) Gulf of Mexico oil spill should look at alternative energy companies with the potential to rally such as Vestas Wind Systems and Veolia Environnement (VE), Royce Tostrams, technical analyst at Tostrams Groep, told CNBC Friday.
Vestas is the world's largest producer of wind turbines with a market share of 28 percent and could be due for strong gains, according to Tostrams.
"It has fallen severely this year ... and now it is finding support at 265 Danish kroner. The downtrend has been broken on the upside and the stock is slowly curling upwards," he said.If Vestas shares break above 300 kroner, they could easily rally to 340, 360 and possibly 380 kroner, according to Tostrams. Veolia Environment, which specializes in environment services, could also be due for gains following sharp declines, Tostrams told CNBC. "Veolia has also fallen down heavily this year from above 26 euros to nearly 20 euros, now it's developing a resistance area at 21.75 euros," he said. If Veolia manages to break above the resistance level, which Tostrams said he believes it can easily do because it has formed a strong "base pattern," then it triggers a buy signal, he said. Tostrams' first target for Veolia is 24 euros and then 26.75 euros.
| More from CNBC
BP $5 Billion Debt Offering May Yield Up to 10%
$20 Billion Gulf Fund, Good for Investors?