FuelCell Energy Confirms Bullish Trend Change After Year-Long 84% Drop: What To Watch

FuelCell Energy, Inc FCEL was trading almost 5% higher on Wednesday in a continued bull run triggered by the stock braking up bullishly from a descending trendline, which Benzinga called out on Jan. 31.

The day after FuelCell prints its first quarter 2021 earnings that are scheduled for Mar. 15 before the market opens, the hydrogen producer will host a virtual investor day event focused on discussing a variety of topics including the company’s growth strategy and how it plans to bring long-term value to shareholders.

The stock has fallen about 84% since it reached an all-time high of $29.44 on Feb. 10, 2021. Investors who bought at that level and held their positions are likely hoping FuelCell’s earnings print and virtual conference can help stage a turnaround for the stock. Regardless of the news events, FuelCell has flashed a number of signals the bottom may be in, and a new bull cycle could be on the horizon.

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The FuelCell Chart: After breaking up from the descending trendline on Jan. 31, FuelCell popped up about 5% higher the following day and then entered into a two-day consolidation period on Feb. 2 and Feb. 3. The consolidation, which brought the stock down toward the $3.99 level, allowed FuelCell to print a higher low on the chart.

The higher low paired with the stock moving up above the Feb. 1 high of $4.60 on Wednesday to print a higher high has confirmed FuelCell is now trading in an uptrend. Bullish traders who are not already in a position could potentially find a solid entry when FuelCell prints its next higher low and can watch for a reversal candle to form, such as a doji or hammer candlestick above the $4.60 level.

On Wednesday, FuelCell regained the 21-day exponential moving average (EMA) as support and if the stock is able to continue trading above the level the eight-day EMA will eventually cross above the 21-day, which would give bulls more confidence going forward. However, FuelCell is trading about 17% below the 50-day simple moving average, which indicates longer-term sentiment is still bearish.

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• Bulls want to see big bullish volume come in and drive the stock price up toward a resistance level at $5.77 and then for the stock to fall down to print a higher low on lower-than-average volume. Above that level, there is further resistance at $7.17 and $8.31.
• Bears want to see big bearish volume come in and drop FuelCell down below $4.60, which will negate the uptrend and cause the stock to lose both EMAs. There is support below at $4.52 and $3.99.

Photo: Courtesy of fuelcellenergy.com