Is Plug Power Ready To Breakout After Being Pinched Between Support And Resistance?

Plug Power Inc. PLUG shares are trading higher Thursday as the broader industrial market sector bounces back. Many stocks are rising on optimism Congress will near a deal preventing a government shutdown.

Plug Power was up 7.48% at $26.44 at last check.

See Also: Why Plug Power Shares Are Rising

Plug Power Daily Chart Analysis

• The stock looks to be nearing the end of what technical traders would call a pennant pattern. If the stock sees a day with above-average volume in the next couple of weeks, it could see a breakout.
• The price had been getting pinched between the highs and lows and is almost to the point of the pennant. A strong push past one of these levels could signal the start of a new trend in the same directions as the breakout.
• The stock crossed above the 50-day moving average (green) Thursday, but trades below the 200-day moving average (blue), indicating the stock is likely in a period of consolidation.
• The 50-day moving average may hold as support, while the 200-day moving average possibly acts as resistance in the future.
• The Relative Strength Index (RSI) has been trading sideways for the past couple of weeks, but saw a push higher Thursday, above the middle line. The RSI at 52 now, shows that the stock is now seeing more buyers than sellers.

What’s Next For Plug Power?

Bullish traders want to see the stock break out of the pattern resistance on above-average volume and start a bullish run upward. Bulls then want to see the stock start forming higher lows and break above the 200-day moving average once again.

Bearish traders are looking to see the stock fall below pattern support and be able to hold the level as resistance. Bears then want to see the stock hold this level and the moving averages as resistance for a possible further push downward.