"Oil is setting the stage for a big rally in alternative energy," says Eric Roseman, resources expert and editor of Commodity Trend Alert. Here's a look at two stocks poised to benefit from this trend.

"A surging oil price is extremely bullish for alternative energy. Over the last 12 months, as oil prices have doubled, uranium and solar energy stocks have crashed.

"These sectors have declined because sub-prime has taken everything to the basement until recently - not because solar energy or uranium are flawed investment themes.

"That's why we've recently placed new trades on Suntech Power Holdings (NYSE: STP) and Cameco (NYSE: CCJ). There's no way high oil prices won't encourage more interest in these distressed sectors.

Suntech Power Holdings Co. (NYSE: STP), which saw its stock surge some 150% in 2007, didn't have such a good 2008 so far with its stock plunging about 44% year-to-date. But since setting a 52-week low of $28.19 on March 22, the stock has rebounded nicely, up over 55%. Roller coaster or what?!

Well, today, the maker of photovoltaic cells and modules said first-quarter earnings more than doubled on 76% higher revenue. Earnings reached $55.8 million, or 33 cents an American depositary share, beating analysts estimates of 28 cents. Revenue reached $434.5 million. Gross margins also expanded nicely and Suntech reiterated revenue estimates for 2008.

Early in the morning, STP shares jumped over 7% in premarket trading in response to the report but have not kept this up. Shares are now trading at $45.73, down over 1%, probably declining with the rest of the sector following Goldman Sachs's downgrade of Solarfun (NASDAQ: SOLF) to Sell from Neutral. SOLF shares are down over 18% taking LDK Solar (NYSE: LDK), Trina Solar (NYSE: TSL) and Canadian Solar (NASDAQ: CSIQ) down with it -- 5%, 8% and 13% respectively, to name but a few.

Suntech Power (NYSE: STP) closed at $47.12 Thursday.

STP is scheduled to report Q1 EPS on May 22.

STP June option implied volatility of 80 is above its 26-week average of 73 according to Track Data, suggesting larger price movement.

China Sunergy (NASDAQ: CSUN), a manufacturer of solar cell products in China, closed at $12.58 Thursday.

CSUN is expected to report Q1 EPS on May 20.

Cowen says: "Key issues: Ramp of new cells, expense control, liquidity."

CSUN June option implied volatility of 111 is above its 26-week average of 100 according to Track Data, suggesting larger price risk.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

"Suntech Power Holdings (NYSE: STP), one of our long-time favorites, is now back on our buy list after being driven down in price by U.S. market volatility and the fallout from a recent earnings report," notes Jim Trippon.

The editor of The China Stock Digest explains, The company is world leader in the manufacture of photovoltaic solar cells and solar electric systems. And, it is developing a new technology to increase solar efficiency." Here is his review.

"The company's solar cells are used to supply power to the electricity grid within China, and it's the number one company in the Chinese solar energy industry. The company's systems also provide dependable power internationally for mobile phone networks and telecommunications relay stations and even street lamps in case of power outages.

"Certainly China is in desperate need of clean renewable sources of energy. Residents of major cities like Beijing and Shanghai are constantly enveloped in a choking cloud of smog. Beijing has said it wants a tenth of its energy to come from environmentally friendly sources by 2010.

"The problem with solar energy has always been the high cost of manufacturing solar cells relative to the amount of power output per cell. Suntech is attacking that problem with rigorous cost control and the competitive advantages that low cost Chinese manufacturers enjoy in the international arena.

Suntech Power Holdings Co. Ltd. (NYSE: STP) shares are trading higher today after the company announced it signed an eight-year deal to buy polysilicon from DC Chemical Co. Ltd. Polysilicon is a major ingredient in the manufacturing of solar cells. If you think that the company won't fall by too much in the coming months now that it has this price for materials locked in place, then now could be a good time to look at a bullish hedged trade on STP.

After hitting a one-year high of $90.00 in January, the stock hit a one-year low of $28.19 last week. STP opened this morning at $31.79. So far today the stock has hit a low of $31.79 and a high of $35.09. As of 12:45, STP is trading at $35.08, up $4.38 (14.3%). The chart for STP looks bearish and steady, while S&P gives the stock a bullish 4 Stars (out of 5) Buy rating.

For a bullish hedged play on this stock, I would consider an April bull-put credit spread below the $25 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. This particular trade will make a 4.2% return in just one month as long as STP is above $25 at April expiration. Suntech would have to fall by more than 28% before we would start to lose money.

STP hasn't been below $25 at all in the past year and has shown support around $30 recently. This trade could be risky if the demand for energy drops off, but even if that happens, this position could be protected by the support the stock might find around $30.

Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in STP.

Suntech Power (NYSE: STP) is recently trading at $36.75 in pre-open trading, below its close of $45.89 (down 20%).

Thomas Weisel says: "First Glance at 4Q results and guidance; Weak guidance will likely pressure shares."

STP overall option implied volatility of 73 is near its 26-week average according to Track Data, suggesting non-directional price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Suntech Power Holdings Co. Ltd. (NYSE: STP) shares are rising this morning, extending gains made after Friday's "Buy" reiteration by Calyon Securities and helped along by higher oil prices. Coming up later this month is the annual U.S. State of the Union Address, and alternative energy is expected to be a major topic. The industry as a whole could be buoyed by investors speculating that there may be new initiatives for that industry. If you think that the company won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on STP.

After hitting a one-year low of $31.41 in June, the stock hit a one-year high of $90.00 this month. STP opened this morning at $68.58. So far today the stock has hit a low of $67.72 and a high of $70.00. As of 10:55, STP is trading at $69.62, up $2.81 (4.2%). The chart for STP looks bullish but deteriorating, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

Suntech Power Holdings Co. Ltd. (NYSE: STP) shares are are continuing to rise after last week's comments by analysts that suggested a separate energy-tax package if solar tax incentives don't make it into the current energy bill. The comments set off a bullish sector rally on Wall Street that looks like it is continuing into this week. If you think that the company won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on STP.

After hitting a one-year low of $29.25 last December, the stock hit a one-year high of $84.94 on Friday. STP opened this morning at $79.32. So far today the stock has hit a low of $78.59 and a high of $82.15. As of 11:05, STP is trading at $80.20, up $1.03 (1.3%). The chart for STP looks bullish and steady, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bullish hedged play on this stock, I would consider a January bull-put credit spread below the $50 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. This particular trade will make a 4.2% return in just 7 weeks as long as STP is above $50 at January expiration. Suntech would have to fall by more than 37% before we would start to lose money.

STP hasn't been below $55 since October and has shown support around $65 recently. This trade could be risky if the cost of energy falls, but even if that happens, there should still be demand for alternative energy innovation.

Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in STP.

Suntech Power Holdings Co. Ltd. (NYSE: STP), a Chinese solar cell company, announced this morning a $1.5 billion contract with Asia Silicon to purchase high-purity polysilicon over the next seven years. The contract secured lower prices for STP than any of its other existing polysilicon contracts. If you think that the company won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on STP.

The stock has been gaining over the past two months, and today's sharp jump propelled shares to a new 52-week high. STP opened this morning at $49.89. So far today the stock has hit a low of $49.03 and a high of $54.70. As of 10:50, STP is trading at 54.55, up 7.61 (16.2%). The chart for STP looks bullish and steady, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bullish hedged play on this stock, I would consider a January bull-put credit spread below the $35 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 5.3% return in just 3 months as long as STP is above $35 at January expiration. Suntech would have to fall by more than 24% before we would start to lose money. Learn more about this type of trade here.

STP hasn't been below $35 by too much since June and has shown support around $39 recently. This trade could be risky if the Chinese economy does not remain strong, but even if it happens, this position could be protected by strong support between $35 and $39, plus the stock's 200-day moving average, which is currently at $37 and rising.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in STP.

"Alternative energies are not just a pie-in-the-sky dream," says Paul Tracy and Nathan Slaughter from the StreetAuthority Market Advisor. "Denmark generates as much as 30% of its power from wind, Iceland uses geothermal energy, and producers are bringing down the cost of solar power."

"Overall, companies involved in alternative power technologies, such as wind, solar, geothermal, and biomass, are getting plenty of attention from investors these days." Here, the advisors profile what they consider to the most attractive companies in the alternative energy space.

Suntech Power Holdings Co. (NYSE: STP), "which manufactures and sells photovoltaic (PV) solar cells, has two primary advantages: a low manufacturing cost base and highly efficient cells.

"For starters, Suntech is based in China, where labor costs (even for skilled research staff) are far lower than in the Western world. The Chinese government also subsidizes such research, further helping companies like Suntech.

"In addition, the firm's cells boast some of the highest conversion rates on the market, allowing the company to offer smaller panels that can produce as much electricity as far larger ones from competitors.

"Suntech has been ramping up its manufacturing capacity rapidly in recent years to keep pace with strong demand. Analysts are forecasting robust earnings growth of 45% annually over the next five years.

What are the best energy investments for long-term investors? To answer this question, I surveyed 20 of the nation's leading financial newsletter advisors to find their current favorite ideas in the energy sector.

Interestingly, the advisors see the best opportunities in areas well beyond traditional oil firms; indeed, no one included in this report chose a major integrated oil company. Rather, the advisors have shown a preference for various oil services sectors, non-oil energy sources, and developing alternative technologies.

Some focus on areas such as deep-sea operations with Diamond Offshore Drilling Inc. (NYSE: DO), Transocean Inc. (NYSE: RIG) and Oceaneering International (NYSE: OII), while others look toward oil shippers such as Nordic American Tanker Shipping (NYSE: NAT) and refiners such as Valero Energy Corp. (NYSE: VLO).

Others chose companies that make specific products needed by the oil & gas industries such as NATCO Group Inc. (NYSE: NTG), which makes a wide range of oil & gas processing systems; Dresser-Rand Group Inc. (NYSE: DRC), a maker of control systems; Gardner Denver Inc. (NYSE: GDI), which makes compressor and fluid transfer systems; Tenaris (NYSE: TS), a maker of pipes and tublar products and Schlumberger Ltd. (NYSE: SLB), the largest and most diversified of the oil services companies.

Hoku Scientific Inc (NASDAQ: HOKU) subsidiary, Hoku Materials, just signed a pact with SunTech Power Holdings Co Ltd (NYSE: STP) wherein Hoku will sell and deliver polysilicon to Suntech beginning in mid-2009. The deal, which was announced yesterday after the markets closed, has sent the stock skyrocketing up nearly 60% to $7.97 in after-hours trading. SunTech closed yesterday at $32.28 and later gained 9c in the extended trading. Shares of Hoku and SunTech are currently trading up $7.38, or up 60.65%, and at $33.00, or up 2.11%, respectively.

The $678M agreement, which has a 10-year term and also allows either company to opt out of the last two years, provides for the delivery of polysilicon, used to make solar energy panels, at set prices. This deal follows an agreement in January between Hoku and Sanyo Electric Co Ltd (OTC: SANYY) that may bring an additional $370M in payments to the materials science company.

Hoku is currently in the process of building a $220M polysilicon production plant in Idaho in order to transition further into the solar industry. The plant will produce polysilicon for its own solar panel business, creating 200 jobs in the process, and will offer excess supply to the semiconductor market.

Analysts at investment bank Thomas Weisel believe this could be a good deal for Hoku, particularly amid its transition into the solar industry. The firm, however, is still concerned about Hoku's ability to raise $150M in debt financing, which it is seeking for the plant. Hoku believes it is currently on track with the plant, but if the company is unsuccessful in building the polysilicon plant or if it does not meet certain milestones with its products, the initial direct deposit must be returned to SunTech.