1. Fundamental Analysis
:(a) Economic, political and environmental aspect:The issue of Global warming has been at the forefront of political and economic debates for more than adecade. Additionally, we have experienced a huge increase in the price of crude oil in the last couple of years. These two factors have compelled the economy to look for alternative solutions to fulfill theenergy requirements.In the recent past, certain energy projects in U.S. involving the use of conventional sources (i.e. coal)have been blocked citing environmental reasons.
Also, a large proportion of corn produced in U.S. isnow being used to make ethanol. Several such examples can be cited to indicate a paradigm shift in theenergy policies inclining towards alternative energies.This issue is being widely discussed in the political arena especially the presidential campaigns in 2008.After all other candidates had grown out of the competition we are left with two candidates with an
entirely different approach towards the “energy independence”.
Democratic candidate, Sen. Obama, has championed alternative sources of energy whereas the GOPcandidate, Sen. McCain, has been emphasizing on drilling more oil and on the use nuclear energy. Basedon the current events and opinions, it is clear that the Sen. Obama has a better probability of becomingthe next president.***
This peculiar environmental, political and economic situation leads me to be bullish on the AlternativeEnergy ETF and at the same time to be bearish on the Nuclear and Oil & Natural Gas exploration ETFs.