Investors who covered their positions for the current nuclear crisis in Japan by selling nuclear and uranium stocks and buying solar and alternative energy stocks might find themselves on the wrong side of the trade, according to Steve Massocca, managing director at Wedbush Securities, and Todd Horwitz, chief strategist at Adam Mesh Trading Group.
"Given where these [uranium and nuclear] stocks are trading now, I think it’s pretty fool-hardy," Massocca told CNBC Friday.
"To think that the nuclear industry is going to go away completely because of what’s happening in Japan—I just think is not realistic.”
Horwitz said uranium and nuclear stocks such as Cameco that were crushed initially have started to make a comeback.
Massoca said while the situation "smells like a trade," he does not think he would invest long-term in the uranium sector.
Horwitz said those who were chasing the solar stock prices such as First Solar are already starting to see a "drastic" sell-off. Further, he said he is looking to short the solar stocks.
According to Horwitz, those investors on the wrong side of the trade were "punished badly."
And Massocca and Horwitz agree the solar industry isn't going to change overnight because of the incident in Japan.
"All of the problems that existed two weeks ago for the solar industry still exist today," Massocca said.
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Disclosure information was not available for Todd Horwitz, Steve Massocca or their respective companies.