One of the questions we most frequently get from readers is about breakout markets and breakout stocks. That is why we are covering breakout stocks more than average in recent weeks.

One of the few sectors that really look constructive at this point: clean energy stocks. It is almost the only potential candidate for a stock market breakout in May of 2017.

Intuitively, clean energy stocks should be in a raging bull market. If there is one clear trend in this world, it certainly is the “green trend”. Clean energy stocks certainly did very well in 2013 and the first months of 2014 but lost 50 percent of their value in the 2 years that followed.

That could be changing now.

The weekly chart of clean energy stocks, represented by QCLN index (First Trust Nasdaq Clean Edge Green Energy Index Fund) makes our point. The index started to breakout from a falling bear market trendline, at 16.80 points. However, after 2 months of a breakout attempt, there is no follow through for now.

There is a potential risk with this breakout. More than 7 percent of the index is made up by Tesla, which, since February, has done exceptionally well. So there is a possibility of a false breakout if Tesla, the leader of the index, loses steam.

The top 5 stocks in this clean energy stock market index, in terms of weight, are Tesla (TSLA), ON Semiconductor Corporation (ON), Microsemi Corp (MSCC), Hexcel Corp (HXL), Acuity Brands (AYI).

The index contains clean energy stocks across several industries, but particularly industrials, technology, oil and gas, utilities.

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