Trading Idea closing - Renewable ETF
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Orsted may pay dividend again after several years
Orsted, the Danish renewable energy utility, recently published its Q2 earnings report, which showed mixed results. The company exceeded analysts’ expectations in terms of both revenue and EBITDA, but fell short of net income estimates. Nonetheless, project developments are on track, and the company’s liquidity position remains adequate. In light of the results, management maintains its 2026 guidance, and announced dividend payment plans for 2027. Overall, Orsted keeps making good progress, so we are keeping the stock on our Equity Top Pick List.
Commodities - Technical Analysis
Gold and silver have broken their downtrends, triggering upward waves that still hold potential for further gains. After a strong retest, the oil price may settle into a range, but there are still opportunities for further gains. Natural gas prices did not reach a new low, but no pattern indicating a reversal has yet emerged. Copper is maintaining its upward trend; it must rise again within the next few days, or the rally could break down. Wheat and corn are also beginning to turn upward again from key support levels after strong retests.
Our trading idea related to the IQQH ETF, which tracks the renewable energy sector has performed well since we published it in early July. We continue to view the sector's long-term outlook as favorable, but given the broader market uncertainty seen in recent days, sharper corrections are possible in the short-term, so it may be worth closing positions for now and realizing the 17-18% profit achieved so far.
Fundamental picture
The IQQH ETF (iShares Global Clean Energy Transition UCITS ETF) includes a mix of renewable energy utilities and manufacturers involved in the sector's supply chain (e.g., solar panels, wind turbines, etc.). We consider the long-term outlook for both segments to be favorable, as global electricity consumption is likely to continue to grow rapidly in the coming years thanks to a number of major megatrends (e.g., electrification, data centers / AI, cooling and heating, etc.).
The renewable energy sector has performed particularly well in recent months, as the market had already priced in almost all the negatives in the period leading up to the Trump administration's legislative package passed in early July, leaving room for a rise. This was helped by several factors: the US Federal Reserve's interest rate cuts in September and October, and the regulatory uncertainty has also ended (the final version of the July legislative package was also milder than expected).
However, investor uncertainty surrounding the AI sector has intensified in recent weeks, dragging down broader market sentiment and the major stock indices as well. In addition, uncertainty surrounds the Fed's December interest rate cut (e.g., mixed labor market data and lack of data due to the government shutdown), which also complicates the situation for investors.
Although the ETF’s price has not yet reached our stop level, which was raised in October (up to EUR 7.7), we are closing our trading idea due to the aforementioned market uncertainty, and it may be worth realizing the profit of ~17-18% achieved so far.
Technical picture
The curve gave long closing signals because falling below 8.2 activated a reversal pattern. In the longer term, however, the long opportunity does not necessarily have to be abandoned. The 7-7.4 range is a strong support level, and if it returns here and remains above the trend line, the long-term outlook may remain positive. In the short-term, however, a correction may occur, so it may be worth exiting the position.
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