The Top Energy Stocks to Watch in 2022

When I put out my last energy stocks watchlist, oil stocks were HOT.

In March of 2022, trashy oil and gas stocks were the market’s hottest sector. 

The frenzy soon abated. But sector leaders like Indonesia Energy Corp Ltd. (AMEX: INDO) had another few runs in them …

Gas prices have fallen since mid-June. But they are back on the rise in some states now.

On the other side of the energy sector, renewables received a boost with the Inflation Reduction Act (IRA). The bill contains $370 billion in climate-focused tax credits, much of which is going to green energy.

This should help double American wind and solar capacity, and attract added capital investment.

When you add in the headlines these energy moves generate, you’ve got a heck of a sector. That’s why I’m keeping these stocks on my watchlist!

The Case for Renewable Energy

EV stocks were one of the hottest sectors of the last few years…

Guess what they run on? Renewable energy.

Renewable energy is a sector with monster potential. There’s a ton of hype, for sure. But some of that hype has been proven — which helps the sector stay hot.

I’d argue that the sector leader is Tesla Inc. (NASDAQ: TSLA). Tesla isn’t an energy stock itself…

But whenever it announces a deal with a new battery producer, the entire sector tends to run!

This phenomenon is called the sympathy play, and this sector sees more than its share. That’s because renewable energy is all about future potential.

That’s why a stock like Plug Power Inc (NASDAQ: PLUG) can have multi-week runs on news and hold onto some gains when the news doesn’t translate to profits.

Many traders see renewable energy as the future. If the Build Back Better Act makes it through the Senate, it will include more than $500 billion for clean energy.

And of course, Tesla’s still lighting up the market. Check out this video on the company’s prospects:

And with Musk buying 9% of Twitter shares, you can bet he’ll continue to make news.

Oil Is One of 2022’s Hottest Sectors

Oil had already staged a remarkable recovery from 2020’s oil crash…

Then Russia invaded Ukraine. Gas prices approached all-time highs and oil penny stocks dominated the market.

Look, this invasion is scary for everyone. My heart goes out to everyone who’s been affected by the war…

But for traders, fear creates opportunity. It’s the same as the vaccine plays of last year or 2020’s stay-at-home sector.

No one wishes for these disruptive global events. But we trade what the market gives us.

We’re looking at a major change in the global economy. The $11 billion pipeline project between Russia and Germany is in limbo. The current pipeline has just been sabotaged.

We can’t know what’s coming next. All we can depend on is more news coming our way…

A watchlist is the best way to prepare ourselves.

Why You Need to Keep a Watchlist

When Indonesia Energy Corp Ltd (AMEX: INDO) ran all the way to $87, smart traders were prepared.

INDO was already on their watchlists after trading 88 million shares on a float of under 2 million. The market comes down to supply and demand.

When 88 million shares trade in one day, you better believe there’s demand!

Keeping watchlists helps us be ready to take advantage of big moves. When you’re talking about 1,800% moves, there’s a lot of upside!

And we don’t lose anything when a stock like INDO fails. We’re watching and waiting for the next opportunity.

Smart traders don’t try to predict when or if that will happen. What we do is keep these stocks on our watchlists. That way we’re prepared for moves that might catch the rest of the market by surprise.

Sign up for my weekly watchlist here to see the stocks I’m watching!

The Top 6 Energy Stocks to Watch

We’re covering our bases with this watchlist. Between world events and recent runners, anything can happen.

I’ll be watching these stocks when it does.

Indonesia Energy Corp Ltd (AMEX: INDO)

We’ve talked about INDO before …

But lost in its mythical March run are the smaller runs it’s made. It had a few spikes in April and May, before settling in the $6–8 range from June on.

In mid-August, it perked up. A combination of the Organization of the Petroleum Exporting Countries (OPEC) cutting production and meme fever sent the stock up 100% over a seven-day span.

More interesting was the volume INDO still can attract. It traded more than 100 million shares during that run — more than 60 million in one day!

That was the most volume it’s traded since its peak.

I don’t think it will get back to its March heights. It’s the king of trashy oil and gas stocks …  but it’s still a trashy oil and gas stock.

INDO has diluted its shares, but the float is still under 4 million. The price will move again the next time volume pours in. 

Altus Power Inc. (NYSE: AMPS)

AMPS made a splash on September 27 by announcing acquisition agreements for nearly 97 megawatts (MW) of solar assets. The stock gained 17% on the day and is still climbing at the time of writing.

It was a good catalyst, and it’s not the only one of late. AMPS has been generating PR off of moves like “[applauding] the signing of the Inflation Reduction Act.”

The PR seems to be working. AMPS was a penny stock in May. It’s gained about 200% in the past four months.

The 466 MW in AMPS’s portfolio is a far cry from the 21 gigawatts (GW) of a sector leader like Brookfield Renewable Partners LP (NYSE: BEP). But its combination of steady growth and smaller market cap makes it capable of the big moves we like to see.

First Solar Inc. (NASDAQ: FSLR)

Heavyweight stocks can go on runs too. As recently as July, FSLR was trading in the $60s. Since then, FSLR shares have gained more than 120%.

In January of 2021, First Solar sold off 10 GW of its solar assets to Leeward Renewable Energy. First Solar then pivoted into the development of solar panels.

The IRA’s signing gave First Solar the green light to expand its solar panel manufacturing operations. It’s planning on a $185 million expansion of its Ohio facilities, and a $1 billion factory in the Southeast.

The manufacturing business seems to be better for the catalysts that have moved this stock in recent months. First Solar got an order for 2.4 GW of solar panels at the end of July, and another order for 600 MW of panels in September. 

Ballard Power Systems Inc. (NASDAQ: BLDP)

BLDP is an energy stock I’ve been watching for a long time … and my faith in it seems like it’s beginning to pay off.

This Canadian company makes fuel cells for commercial electric vehicles like trucks, buses, trains, and ships. I think that the sustainable transit space will be one of the biggest sectors to be affected by the EV revolution in the near future.

I featured this stock in my StocksToTrade Advisory Special Report. This is a subscription package we’ve assembled with my best ideas on stocks positioned for big future growth …

If you want to check out more stocks that could benefit from clean energy trends, sign up for StocksToTrade Advisory here.

BLDP spiked on this hot sector enthusiasm in January 2021. It’s since lost about 84% of its value.

Although it failed to live up to the hype, BLDP is making progress toward its goals. On September 26, it announced a deal to power the first American train that runs on hydrogen. It also has deals in place to power Canadian, Indian, and German hydrogen trains.

These aren’t huge deals, but BLDP is positioning itself to be a sector leader in this emerging space.

Occidental Petroleum Corporation (NYSE: OXY)

The last time we looked at OXY was in my September watchlist …

It was pushing all-time highs on news of a Warren Buffet acquisition. It looked like it was on the verge of a breakout.

Since my watchlist came out, the stock’s value has fallen by more than 20%. What happened?

There were a few factors in OXY’s pullback. Enthusiasm was high — higher than returns. Short sellers came out of their caves — short interest is now over 6% of the float. For comparison, Exxon Mobil Corp. (NYSE: XOM) has a short interest under 1%.

Then the knives came out. A Citi analyst downgraded the stock from ‘buy’ to ‘neutral’. He said that its remaining upside potential was ‘modest’.

So why am I featuring OXY on another watchlist? No need to overthink it — OXY was one of the best-performing stocks of 2022, and it’s one catalyst away from making another big run.

We’re not predicting the future with our watchlists. We’re just brainstorming some ideas. That way we’re ready when one of them works.

Chevron Corporation (NYSE: CVX)

OXY wasn’t the biggest Buffett oil and gas play of 2022. In the first quarter of 2022, Buffett’s Berkshire Hathaway quadrupled its Chevron position. As of May, it owned about 8% of the oil giant.

The stock ran into June. Now it’s pulled back to March levels.

On a broader level, it’s mirrored the XOI oil stock index, gaining nearly 200% since March 2020.

Recently the company has committed to carbon neutral energy production for its future. This has prompted some pushback from shareholders, but it’s also a sign of a clean energy move.

Chevron is upping its PR game by engaging with retail traders. It’s suffering from the same problems as other oil and gas stocks — with a side of Hurricane Ian disruptions — but this pullback might just be a blip on its upward trajectory.

Conclusion

I’ve given you my best ideas for the energy sector’s future…

Now comes the hard part: You need to put in the work. That means creating your own watchlists and getting to know the stocks on them.

There’s no guarantee any of these stocks will run in the future. Sometimes the best trade is no trade.

The work we have to do as traders is preparing for when opportunity strikes. 

What do you think about my energy stock watchlist? Have you traded any of these stocks in the past? Let me know in the comments!