Claymore/MAC Global Solar Index ($TAN) is in the process of forming the "right side" of the base. Looking at the weekly chart below, we see that the price action has reversed higher off support at $15, on big volume:



On the daily chart, we see that there was a bullish crossover signal with the 50-day MA crossing above the 200-day MA back in February. After breaking the downtrend line of the base in early April, $TAN rallied back above the 200 and 50-day MAs, and is now trading in a tight range just below the base high. Ideally, we'd love to see a few more weeks of basing action before $TAN hits new highs. This basing action is known as a handle, which should drift lower and have a few shakeout days:



The monthly chart shows the price action holding above the monthly downtrend line breakout. $XLE is clearly not leading the market, but as the price action strengthens, it could possibly become a leader during the next rally:

 

Deron Wagner is the Founder and Head Trader of both Morpheus Capital LP, a U.S. hedge fund, and MorpheusTrading.com, a trader education firm.