Wells Fargo upgraded solar stocks Sunrun Inc (NASDAQ:RUN), Sunnova Energy International Inc (NYSE:NOVA), and First Solar Inc (NASDAQ:FSLR) to "overweight" today. The firm is bullish on the clean energy industry due to strong underlying demand, particularly in Europe, as well as legislative support stateside, and added it favors solar over hydrogen. However, the brokerage also sees near-term headwinds from the Fed's rate tightening.

Sunrun stock is up 2.9% at $22.87 at last glance, and down 27.9% year-over-year. The security is overdue for a short-term bounce however, as per its 14-day relative strength index (RSI) of 13.9, which sits firmly in "oversold" territory. Plus, short interest represents 13.8% of the stock's available float, or nearly four days' worth of pent-up buying power. 

NOVA is staging a bigger bounce, up 3.7% at $17.73 at last check. Down 25.1% year-over-year, the stock has struggled with pressure at the $24 level over the past few months. The stock is seeing attractively priced premiums at the moment, per it's Schaeffer's Volatility Index (SVI) of 74%, which sits in the 9th percentile of its annual range. Furthermore, its Schaeffer's Volatility Scorecard (SVS) sits at a 93 out of 100, meaning NOVA has exceeded option traders' volatility expectations during the past year.

First Solar stock is having the best day out of the three, up 6.5% at $154.89 at last glance. The outperforming energy name is up 85.4% year-over-year, and the 100-day moving average caught a pullback in the last session. An unwinding of pessimism in the options pits could send FSLR higher still, as its 10-day put/call volume ratio of 2.60 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks in the 98th percentile of its annual range. 

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The stock market just wrapped up its worst year since 2008. In the last calendar year, there was a lot of time spent in this space unpacking the comeuppance of growth stocks, the tech correction, and the general malaise surrounding the stock market. Tesla Inc (NASDAQ:TSLA), tech, and the flavor of the week may have gotten most of the headlines, but in the last 12 months, the energy sector quietly chugged along, roaring past the S&P 500 Index (SPX) in 2022. In the spirit of New Year and reflection, let’s look back on the energy sector’s big year and see what could be in store for 2023.

Energy stocks outperformed the rest of the S&P 500 this year.

H/t to @chigrl who saw this coming way in advance. pic.twitter.com/CxYtYqQBih

— Markets & Mayhem (@Mayhem4Markets) December 29, 2022

The tweet above shows just how monumental the share price growth was for energy in 2022. The global eruption of commodity prices was triggered by Russia’s invasion in Ukraine that began in February and dragged on through the year. Sprinkle in the inflation spikes and it was a goldilocks environment for oil companies — Chevron Corporation's (NYSE:CVX) roughly 52% gain paced the Dow, while Occidental Petroleum Corporation (NYSE:OXY) took home gains of about 116%.

Look down the list of oil stocks and you’ll see healthy gains throughout, even beyond the household names. One example is Vertex Energy Inc (NASDAQ:VTNR), a Schaeffer’s Top Stock Pick of 2022. The equity was attractive in December 2021 because of the company’s acquisition of the Mobile refinery from Shell PLC (SHEL). Vertex was also transitioning into waste oil refining, which offered much higher margins than traditional refining operations. There was enticing short squeeze potential 12 months ago, too, with 20% of the stock’s total available float sold short. VTNR is now up more than 34% year-to-date and traded as high as $18.10 in June.

As the calendar turns to 2023, what’s the outlook for these darlings of 2022? There’s a natural gas crisis in Europe to monitor, but many investors remain bearish on the energy sector. On Wednesday, Senior Quantitative Analyst Rocky White compiled a list of stocks where short sellers were at a loss. Six oil names – and one alternative energy company, to broaden the energy bucket -- stood out for their high short interest to float percentage, per the table below.

White also compiled a list of the best-performing exchange-traded funds (ETFs) in the last 10 years during January. The VanEck Vectors Oil Services ETF (OIH) averages a January return of 2.7% with 60% of the returns positive, a tally that’s fifth best of the 25 ETFs tracked. Also note that alternative energy ETF Invesco Solar ETF (TAN) is an intriguing name to watch, with an average January return of 3.3%.

Of course, the last thing to monitor heading into 2023 with energy stocks is the price of crude. West Texas Intermediate hasn’t settled above $100 per barrel since June and is back at levels from before Vladimir Putin lost his damn mind. yet black gold is still on track for an annual gain, and could be ready to rumble higher again, with three macro factors to be considered.

First, releases from the U.S. Strategic Petroleum Reserve— done by the Biden administration earlier this year – addressed supply disruption, but what impact will the eventual repurchasing mean? Secondly, China’s economy will slowly be reopened, reinserting a major economic player to the equation. What does their economic status bring to the table in regard to crude? And finally, what does a potential resolution to the Russia-Ukraine conflict, or sanctions stemming from its continuity, mean for crude prices?

If these developments mean more clean balance sheets for oil companies, then 2022 could just be the jumping off point for many stocks in the sector, one that as noted above, still has plenty of bearish detractors. That could mean a green light for contrarian traders looking to start 2023 on the right foot.

Schaeffer’s Top 2023 Picks

Stock futures are higher this morning, as jobs data continues to roll in. Nonfarm payrolls rose 223,000 in December, which is higher than the 200,000 anticipated by analysts, while the unemployment rate dropped to 3.5%. Average hourly earnings rose a less-than-expected 0.3% points, which could signal easing of inflation pressures. Futures on the Dow Jones Industrial Average (DJIA) are up triple digits, while S&P 500 Index (SPX) and Nasdaq-100 (NDX) futures sit more modestly in the black. For the week, all three are eyeing a loss. 

Continue reading for more on today's market, including:

• Schaeffer's Market Mashup highlights some of the best moments of 2022.
• See what economic data is due out next week. 
• Plus, WBA reports earnings; WEN receives a downgrade; and AMZN announces job cuts. 

5 Things You Need to Know Today

1. The Cboe Options Exchange (CBOE) saw more than 1.1 million call contracts and 970,390 put contracts traded on Thursday. The single-session equity put/call ratio rose to 0.86 and the 21-day moving average stayed at 0.80.
2. Tesla Inc (NASDAQ:TSLA) is down 7.2% premarket, after the electric vehicle (EV) giant cut its prices for its Model 3 and Model Y vehicles in China. Should these losses hold, TSLA could see another two-year low on the charts. 
3. Wells Fargo upgraded Lululemon Athletica Inc (NASDAQ:LULU) to "overweight" from "equal weight," with a price-target hike to $380 from $360. Year-over-year, LULU is down 10%. 
4. The shares of Bed Bath & Beyond Inc (NASDAQ:BBBY) are plummeting before the bell, down 12.4%, after reports that the company is low on cash and considering bankruptcy. No fewer than four analysts slashed their price targets on the penny stock following the news.
5. Today will bring the Institute for Supply Management (ISM) services index, factory orders, and core equipment orders.    

Europe Unpacking Inflation Data

Asian markets closed the week mostly higher, led by South Korea’s Kospi, which rose 1.1%. In China, the Shanghai Composite tacked on a paltry 0.08%, after regulators in the country signaled plans to relax restrictions on developer borrowing to boost the property sector. Hong Kong’s Hang Seng, meanwhile, fell 0.3% following the news. Rounding out the region, Japan’s Nikkei gained 0.6%, after its services sector grew for the fourth-straight month.

Inflation in the euro zone fell for a second-straight month in December, bolstering hopes that the European Central Bank (ECB) will pull back on its hawkish monetary policy. Additionally, investors in the region are eyeing the stateside nonfarm payroll data. European markets are cautiously higher this afternoon, with Germany’s DAX last seen flat, while France’s CAC 40 and London’s FTSE stand 0.4% and 0.3% higher, respectively. 

Costco Wholesale Corporation (NASDAQ:COST) is working to erase yesterday's pullback, up 2.3% at $460.34 before the bell, following the release of the retailer's December sales results. Costco posted net sales of $23.80 billion last month, marking a 7% year-over-year increase. 

In response, UBS lifted its price target to $600 from $565, while D.A. Davidson raised its price target by $8 to $478. The 12-month consensus price target already sits at $551.77, which is a 22.6% premium to last night's close. Meanwhile, 17 of the 22 in coverage call COST a "buy" or better. 

Options players aren't nearly as optimistic. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), COST sports a 10-day put/call volume ratio of 1.22, which sits in the 86th percentile of its 12-month range. In other words, puts have been more popular than usual. 

With overhead pressure at the 10-day moving average keeping a lid on shares, COST fell back toward its Jan. 3, nearly seven-month low of $447.90. The stock has been on a downward spiral after a rally failed at the $542 mark, putting shares at an 18.1% year-over-year deficit. However, the equity is sitting firmly in "oversold" territory -- with a 14-day Relative Strength Index (RSI) of 21 -- meaning a short-term bounce could be right on the horizon. 

Every day for the next week, we're going to highlight one of Schaeffer's top seven picks for 2023. First up, we have drugmaker AbbVie Inc (NYSE:ABBV). To access the entirety of the 2023 report, click here.

The shares of pharmaceutical name AbbVie (ABBV) have outperformed in 2022, and the pullback on the stock’s weekly chart found support at the year-to-date breakeven level. The rising 50-week moving average has defined the intermediate trend since the stock’s low in 2020 as well, making now an ideal time to bet big on ABBV in the coming year.

ABBV’s Relative Strength Index (RSI) on the weekly chart shows a move above the 50 mark, after previously being in an oversold condition. This comes just as the shares are breaking out of a bullish falling wedge pattern on the same chart. Analysts are mostly split on the equity, with 50% carrying a "buy" or "strong buy" and the remaining a "hold" or "strong sell." In simpler terms, this leaves plenty of room for upgrades in the weeks and months ahead.

Lastly, options are certainly an intriguing route, per the security's Schaeffer's Volatility Scorecard (SVS) sits at a relatively high 71 out of 100, which means ABBV has exceeded option traders' volatility expectations during the past 12 months.

While today's upbeat private payrolls report might have been good news for some, Wall Street is viewing it as a sign that aggressive rate hikes from the Federal Reserve are far from over. The Dow wound up shedding over 300 points, while the S&P 500 and Nasdaq also suffered steep losses. Meanwhile, the Cboe Volatility Index (VIX) -- Wall Street's "fear gauge" -- is back on the rise after plummeting during yesterday's session. 

Continue reading for more on today's market, including:

• 3 stocks making big waves today.
• Checking in with the crypto sector. 
• Plus, WDC's merger update; put traders target WBA; and a surging biotech to watch.

5 Things to Know Today 

1. Delta (DAL) announced it will start offering free Wi-Fi to customers, starting Feb. 1. (CNBC)
2. Federal regulators are pushing to ban companies from making their employees sign noncompete clauses. (MarketWatch) 
3. Merger buzz gave Western Digital stocks a boost.
4. How options players responded to Walgreen's quarterly report. 
5. The surging biotech stock to keep an eye on. 

Gold Takes a Breather After 4-Day Win Streak

Oil rose after the Energy Information Act (EIA) shared a smaller-than-expected jump in weekly U.S. crude supplies. West Texas Intermediate (WTI) crude for the now most active, February delivery, added 83 cents, or 1.1%, to settle at $73.67 per barrel.

Gold cooled today amid profit taking on the precious metal's four-day win streak. February-dated gold shed $18.40, or 1%, to settle at $1,840.60 per ounce.

Volatility in the cryptospace is showing no signs of slowing down. The fallout from the collapse of FTX continues to weigh on cryptocurrency and crypto-adjacent stocks, with multiple falling to multi-year lows early last month.

Recently, MicroStrategy (MSTR), the largest corporate buyer of Bitcoin (BTC), saw its shares tumble, amid the industry's efforts to fight bankruptcies, dour sentiment, and heavy regulatory scrutiny. 

Amid this tumultuous environment, two crypto stock are making big moves today.

Coinbase Settles With New York Regulators

Yesterday, Coinbase Global Inc (NASDAQ:COIN) agreed to pay a $50 million fine to New York regulators. The company was found to have let customers open accounts with simple social media verification counting as background checks, as well as violating anti-money laundering laws. According to the state's Department of Financial Services, "Coinbase failed to build and maintain a functional compliance program that could keep pace with its growth."  

Following the news, Cowen and Company downgraded COIN to "market perform" from "outperform," and lowered its price target to $36 from $75 -- a 52% cut. Coming into today, analysts were split, though there's still room for downgrades considering 11 of 21 rate Coinbase stock a "buy" or better. What's more, the 12-month consensus target price of $72.36 is a 113.8% premium to the equity's current perch, signaling room for more adjustments.

Coinbase stock was last seen 9.3% lower to trade at $34.23, so it's managing to hold above its Dec. 28, roughly two year-lows of $31.83. A confluence of short- and long-term moving averages are pressuring COIN, too, as it sits more than 85% lower from just a year ago.

FTX Collapse Sinks Silvergate Capital

Silvergate Capital Corp (NYSE:SI) shared that its digital asset deposits fell by $8.1 billion from Sep. 30 though the end of 2022. The crypto friendly bank was dented by a "crisis of confidence" in the crypto sector, and was subsequently forced to sell $5.2 billion in debt to cover withdrawals. That sale resulted in a $718 million fourth-quarter loss, forcing the company to cut 40% of its staff. 

At last glance, Silvergate stock is 44% lower to trade at $12.28. Now trading at more than two-year lows, SI's all time high of $239.26 -- from November 2021 -- is all but a distant memory. The equity now sports a more than 91% year-over-year deficit.

Investors are keeping a close eye on the market today, as hope for a New Year's rally begins to dwindle. There are three names in particular, though, that have caught our eye: American auto manufacturer Ford Motor Company (NYSE:F), embattled home goods retailer Bed Bath & Beyond Inc (NASDAQ:BBBY), and cloud-based software name Crowdstrike Holdings Inc (NASDAQ:CRWD). 

Ford Reports 3.2% Jump in December Sales

Ford stock is brushing off today's selloff, last seen up 1.7% at $12.22, following the company's December sales report. Ford posted a 3.2% year-over-year rise in sales last month. This number was helped by electric vehicle sales, which saw a 222.6% jump. The stock is currently rallying off a familiar floor at the $11 mark, though its 20-day moving average remains as potential resistance. 

Bed Bath & Beyond Plunges Deeper Into Penny Stock Territory

Shares of Bed Bath & Beyond shed almost a quarter of their valuation this afternoon -- last seen down 24.9% at $1.81 -- after warning that it could soon run out of cash and is now considering bankruptcy. The retailer said worse-than-anticipated sales are a driving factor, and it's now exploring several financial channels. The stock is trading at its lowest level in over 30 years, and now suffers an 86.5% year-over-year deficit. 

Crowdstrike Hit With Bear Notes 

Software concern Crowdstrike just posted weak sequential key metrics for its fourth quarter, leading several analysts to throw in the towel. No less than three analysts slashed their price targets. Jefferies lowered its price estimate to $120 from $175, and downgraded the stock to "hold" from "buy." The 12-month consensus price target of $179.32 still sits at a lofty 86.2% premium to current levels. Meanwhile, all but two of the 34 analysts in coverage called CRWD a "buy" or better, heading into today. The security was last seen down 9.1% at $94.91, sitting at its lowest level since August 2020.