Aaron Chew, an analyst at Maxim Group, summed up the solar rally by noting that it's a sector that has always traded on sentiment. Macroeconomic sentiment has been high, solar stocks are high beta plays, and on Thursday, there was positive news specific to the sector to add to the recent bounce in solar stocks. Solar stocks have also been heavily shorted over the past few months.
"My take there is no need for an academic exercise trying to find a connection between incremental earnings confidence and market cap gains. It's more generally positive sentiment in solar with two of the largest players locking up 10%+ of their 2H11 volumes and FSLR landing $4.5 billion in loan guarantees. With the high short interest, there's no need to be precise about this ping-pong madness."
Yingli Green Energy shares were up by 7% on Thursday.
Trina Solar shares rose by 3.5%, which was a typical gain in the solar sector on Thursday.
-- Written by Eric Rosenbaum from New York.
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