A sudden policy shift in Washington regarding renewable energy has sent shockwaves through the US solar industry, triggering a massive sector-wide sell-off. Leading the decline was industry giant First Solar, whose shares were punished by investors reacting to the unexpected political developments.
Market Rout and Technical Breakdown
First Solar experienced one of the most severe single-day declines within the entire S&P 500 index. At its lowest point, the stock plummeted by as much as seven percent, breaching several key technical support levels. This dramatic sell-off reflects mounting investor anxiety following leaked information suggesting the US administration may halt approvals for new solar and wind energy projects indefinitely. The sell-off has completely erased the stock’s previously positive year-to-date performance.
Widespread Sector Impact
The negative sentiment created a domino effect across the entire clean energy sector. Not only did First Solar shares tumble, but other major solar companies including Sunrun, Enphase Energy, and SolarEdge also registered significant losses. Market activity is sending an unambiguous message: investors fear a substantial deterioration of the regulatory landscape for solar energy providers in the United States.
Should investors sell immediately? Or is it worth buying First Solar?
Options Activity Signals Growing Pessimism
Some market participants appeared to anticipate the downturn. Trading activity in First Solar put options surged to four times the average daily volume, indicating a sharp rise in bearish sentiment. Speculation was particularly concentrated in weekly $202.50 put options, suggesting traders are positioning for further price declines in the near term.
The critical question facing investors is whether this represents an exaggerated panic reaction or the beginning of a sustained downturn for the American solar industry.
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