Why FuelCell And Plug Power Look Charged Up For A Drive North

FuelCell Energy Inc FCEL and Plug Power Inc PLUG have been pummeled since reaching all-time highs of $29.44 and $74.49, respectively. The Senate passage of the infrastructure bill, which creates an $8-billion opportunity for the clean hydrogen industry, gave both stocks a small boost before they were knocked back down to the lows.

The green hydrogen sector has largely failed to garner investor interest since the first quarter despite a progressing global agreement to move toward clean energy. That could be set to change, however, and both FuelCell and Plug are at key support levels waiting to rebound.

See Also: If You Had $5,000 Right Now, Would You Put It On Tesla, Nio, Workhorse, Plug Power Or FuelCell?

The FuelCell Chart: FuelCell is trading down over 80% from its Feb. 10 all-time high. On Aug. 9, following the Senate passage of the bill, the stock reached a high of $8.31 but slammed into resistance at the level and immediately sold off.

On Tuesday FuelCell created a new low at the $5.77 level but found support there from previous price history in November 2020 and bounced. The bounce allowed FuelCell to print a doji candlestick pattern which, at the bottom of a downtrend, indicates a reversal to the upside is in the cards. Wednesday’s candle will be needed to confirm the pattern.

FuelCell may have also created a bullish double bottom pattern paired with the Aug. 5 low of $5.88. When a stock hits an area of support or resistance more than once and rejects the level, it can indicate a reversal in price action.

FuelCell is trading below the eight-day and 21-day exponential moving averages (EMAs) with the eight-day EMA trending below the 21-day, both of which are bearish indicators. The stock is also trending below the 200-day simple moving average (SMA) indicating overall sentiment in FuelCell is bearish.

• Both bulls and bears will need volume to come into the stock to push FuelCell up into a bullish trend change or drop it down below the key support level. FuelCell has resistance above at $8.31 and $10.58 and support below at $5.77 and $3.36.

The Plug Chart: Similar to FuelCell, Plug is down almost 70% from its Jan. 26 all-time high. The stock has also repeatedly hit a support level at the $24.40 level and bounced. For Plug, this has caused the stock to create a bullish quadruple bottom pattern after hitting the level on July 19 and Aug. 13, 16 and 17.

On Tuesday Plug bounced from the level and printed a bullish engulfing candlestick pattern. The bullish engulfing pattern indicates high prices may come immediately and when Plug printed the same pattern back on April 21, the stock rose over 10% in the six trading days that followed.

Plug has a gap above between the $40.53 and $41.85 level and because gaps are filled 90% of the time it is likely the stock will trade back up into that range in the future.

Plug is slightly below the eight-day and 21-day EMAs with the eight-day trending below the 21-day. The stock is also trading below the 200-day SMA.

• Like with FuelCell, Volume needs to increase on Plug to give bulls or bears confidence the stock is ready to make a move. Plug has resistance above at $28.80 and $34.48 and support below at $18.47 and $14.20.

• See also: How to Buy FuelCell Energy (FCEL) Stock