(American Superconductor story updated for Tuesday close)NEW YORK (TheStreet) - The fortunes of wind energy firm American Superconductor (AMSC - Get Report) rebounded on Tuesday, as the company's shares jumped more than 8.6%, or $2.26, to $28.40.

American Superconductor experienced twice its average daily volume of trading on Tuesday, with 2.4 million shares traded, versus under 1.3 million shares traded on an average day.

Tuesday represented a reversal of recent negative trading sentiment for the wind sector.

On March 16, shares of American Superconductor had slid below $26 after Citron Research issued a negative research report.

One of the reasons cited for pessimism about American Superconductor shares in the negative Citron report last week was, in fact, a reason for bullish sentiment on Tuesday. Citron had cited American Superconductor's reliance on a single customer as a significant risk: The Chinese wind-turbine manufacturer Sinovel commands a huge portion of American Superconductor's business. Meanwhile, Citron said, demand remains weak for wind energy in China.

Late on Monday, American Superconductor announced it had placed an order for electrical components to be used in a five-megawatt wind turbine, a new product line from Sinovel. While the companies had mentioned they would be working together in this project previously, fears that Sinovel would ultimately move to a private-label brand were mitigated by the announcement.

Tuesday morning, Jefferies upgraded American Superconductor shares to a buy with a target price of $35.

It's a small deal, but Wunderlich Securities analyst Theo O'Neill, who rates the company's shares a buy with a $50 price target, said the deal was the tip of the iceberg.

"This initial order is small but that is the way these orders start," O'Neill wrote in a note to clients Tuesday. "Three years after introducing its first turbine, Sinovel ordered over a thousand electrical components. We would argue that the time between initial order and production is shrinking as both the market develops and as Sinovel's reputation grows."

American Semiconductor expects to deliver the electrical control systems to Sinovel in the second half of calendar year 2010.

Sinovel expects to have its first 5 MW wind turbines built within the next 12 months and to commence full production of the turbines in 2011. Broadwind Energy ( BWEN - Get Report) also spiked by more than 6% on Tuesday, and experienced close to twice it average daily trading volume.

Earlier this month, Broadwind released a weak earnings report and outlook for the first half of 2010 that sent Broadwind shares toward a trough point.

Tuesday was a bullish day for alternative energy stocks more generally. Both U.S. and Chinese solar stocks rallied extensively.

--Reported by Eric Rosenbaum in New York.


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