One thing a
bull market does is set up a lot of lucrative short opportunities.
This was
detailed in previously about Bon-Ton Stores (NASDAQ: BONT). Those who established a short
position based on that article have done well as the stock is down more than 30 percent for
the last month of market action. A similar opportunity appears to be developing
in the wind power industry with its exchange traded fund, First Trust Global Wind Energy (NYSE: FAN), and stocks in the sector, such
as Federal Mogul (NASDAQ: FDML), which makes ball bearings for the
equipment.
The bull
market of 2013 was generous to those long on First Trust Global Wind Energy and
Federal Mogul.
For 2013,
First Trust Global Wind Energy soared more than 60 percent. Over that same
period, PowerShares Global Wind Energy rose over twice that, skying higher by
more than 130 percent. But support from the American taxpayer is ending, which
will definitely have the wind in the face of investors.
But what
should be even more of a concern is the falling price of oil and coal.
Wind now
supplies less than four percent of the electricity in the United States. Most
of the electricity still comes from coal. More is coming from natural gas,
though. Fracking has made natural gas and oil much more viable fuel sources in
the United States.
At present,
natural gas is high due to the polar vortex.
But it will
be falling soon. Even with the price higher due to the record weather in the United
States, the exchange traded fund for natural gas, United States Natural Gas (NYSE: UNG), is nearly 12 percent below its
52-week high. The exchange traded fund for oil, United
States Oil (NYSE: USO), is down around 4.4 percent for 2013. Market
Vectors Coal (NYSE: KOL), the exchange traded fund for coal, is off by more than 26 percent for
the last year of market action.
Between the
falling prices for more efficient fossil fuels and the loss of support from the
American taxpayer, securities in the wind power sector could be running out of energy in 2014.
Read more
Benzinga.com small-cap articles: http://www.benzinga.com/news/small-cap
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