I admit to recent inattention to a few stock groups–business demands, and more focus on ETFs and gold stocks being the culprits. Much has gone on in groups that had been appealing months, even years ago. In some cases, like the solar stocks, the Bear has trashed them behind recognition.

WFR, a former high flyer in the 2006-2007 period, plunged from around 100 to the 12-14 level even as oil prices recovered to $80. In fact, almost the whole group of former solar stars–FSLR, LDK, HOKU, ASTI, SOL, ESLR–have thudded down from unsustainable highs. Now, months after sideways action, they are AFAs, or Alex’s Fallen Angels.

As most know, these are former high flyers that have crashed and burned, yet still have a pulse in charred remains. Or, less descriptively, they have formed a really big ‘L” on the weekly charts, price is close to the flattening long-term MAs, and there are subtle signs of accumulation on the daily charts. Most of the solar stocks in my database fit this pattern, more or less, and I’m looking to buy them on weakness. The daily chart of WFR clearly shows renewed interest, or accumulation, in the FI and the upturned MAs. We have even managed to get to ST/OB and a break of the volatility bands, two signs that the game is on. I’m looking to buy on a bounce off the rising 20 EMA for a run to the 200 SMA. Generally, we should find resistance at the 200 SMA and another pullback and retest and eventually, we pop through and start a bull run.

While I’m expecting some sort of market correction soon, it wouldn’t surprise me to see the solar stocks and probably the biotechs, morph into leaders for 2010.