SunRun’s stock dropped sharply by 40% on Tuesday, leading a broad sell-off in solar energy stocks after the Senate voted to fully remove clean-energy tax credits in its budget bill.
This move follows the House’s earlier decision to end tax credits for wind and solar projects by 2029, accelerating the phase-out timeline and increasing uncertainty in the sector.
SunRun’s shares closed at $5.78, down from a 52-week high last August, losing about 75% of their value since then. The decline reflects investor concerns over policy changes, regulatory uncertainty, and weaker demand in the solar industry.
Technical analysis of SunRun’s weekly chart shows a persistent downtrend since early 2021. A bearish “falling three methods” pattern has formed, suggesting the stock’s long-term decline may continue. The recent “death cross” in September 2022, where the 50-week moving average fell below the 200-week moving average, further confirms this trend.
The relative strength index (RSI) has dropped below neutral levels, indicating renewed selling momentum. Trading volume has also increased recently, signaling heightened investor activity.
Key price levels to watch include support around $4.75, a historical floor from 2016-2017, and a possible further drop to $4.33 if the stock breaks below that support.
This target is based on a similar 40% weekly drop in March 2020 during the pandemic sell-off, followed by a 25% further decline before a recovery. On the upside, resistance levels near $8.50 and $13.25 should be monitored during any potential rebound.
The Senate’s proposal to phase out solar and wind tax credits by 2028, faster than the current law’s 2032 schedule, has dampened sentiment across the solar sector. Other major solar stocks like SolarEdge and Enphase also plunged sharply, with declines of around 33% and 27%, respectively.
Financially, SunRun faces pressures with a high debt-to-equity ratio and negative free cash flow, compounding challenges from the changing policy landscape. Analysts have lowered price targets and ratings in response to the evolving legislative environment, reflecting a cautious outlook for the company and the industry.
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