Updated from 6:59 a.m. EDTSentiment is still ruling the solar-power sector. The only thing is, it's not clear right now whether the bulls or bears are going to prevail in the short term. The bullish case goes something like this: If investors in other sectors start looking for new areas of growth in which to put their money, clean tech is a good candidate. And solar power is one of the brighter spots in clean tech. After all, with oil prices soaring into the triple digits, homeowners and companies are starting to see the real appeal of solar panels. You pay up front, but you don't have to worry about the costs of generating power. And prices are dropping as capacity booms. Then there's the bearish case. First, many stocks are overvalued. They may be less a safe haven than a fad, as Roger Nusbaum pointed out on TheStreet.com recently. Amid the differing opinions, other issues need to be worked out. Are makers of thin-film solar panels better or worse than more advanced technologies? Thin film is cheaper, but less efficient. Can different technologies coexist in the market, or will one predominate? Will the shortage of silicon linger? Will we soon face an oversupply of panels? What's more, over the weekend the Washington Post published a story that reported that a large Chinese maker of polysilicon, which is used by solar-cell producers, was dumping manufacturing waste outside its factory. This doesn't help advocates of -- and investors in - solar companies betting on the energy as a clean alternative. This is the backdrop behind the tug of war we've been seeing in recent weeks over solar stocks -- just the kind of cocktail of speculation and uncertainty that can lead to volatility in share prices. For example, First Solar ( FSLR) fell as low as $196 last Tuesday from its $208 close a day earlier. It's not clear why -- there were no announcements or news, but the next day, it shot up to $213, only to close the week down to $196, its lowest finish since delivering blowout earnings last month. For day traders, this is wonderful material to work with, but it doesn't help much with insight. The overall volatility has been on the downside recently. On Friday alone, Hoku Scientific ( HOKU) lost 10.5%, while First Solar, JA Solar ( JASO), Solarfun ( SOLF) and Trina Solar ( TSL) all dropped more than 5%. In some cases, the downward draft is brushing aside good news. Take Trina Solar, a Chinese maker of thin-film solar panels. Its stock has been particularly volatile since going public in December 2006. On Tuesday, Trina announced a 62-cents-a-share profit that was more than double the 38 cents in the year-ago period. The Street was expecting 49 cents a share. Trina's $101 million revenue for the quarter grew 167%, above the $95 million analyst estimate as it expanded its production capacity and ramped up four new cell production lines. And its gross profit margin expanded nicely to 27% from 23% in the year-ago quarter. Operating margin was 16% in the quarter, up from 15%. But one reason for Trina's stock volatility is that its earnings results can be equally volatile. In November, Trina's profit came in 18% smaller than the market's forecast (28 cents vs 34 cents) while revenue was just in line with forecasts. Trina plunged as much as 31% on that disappointment. But this most recent quarter, when earnings came in 27% above than the Street's forecasts on stronger-than-expected revenue, the stock moved up as much as 12%. It has since given up most of those short-lived gains. Trina closed Friday at $31.50, more than a dollar below its price before its positive earnings surprise. (On Monday, Trina and other solar stocks were hit by the combination of a broad market selloff and the disturbing story in the Post.) But back in November, after that 31% plunge, Trina was around $33. So, following a good quarter, the stock is even further below where it was after its bad quarter.