FuelCell Energy Stock Looks Weak Vs. Broader Market: What's Going On?

FuelCell Energy, Inc FCEL was plunging lower on Wednesday in tandem with the S&P 500 and saw volatility in the morning session.

When the S&P 500 began to rebound, however, FuelCell remained down considerably, showing comparative weakness to the wider market. 

FuelCell’s bearish price action on Wednesday indicated that Tuesday’s rally was a bull trap, despite the stock negating its downtrend by printing a higher high. Unless the stock can form a reversal on Wednesday or Thursday above $3.30, FuelCell could be headed for 52-week lows.

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The FuelCell Chart: If FuelCell closes the trading day near its low-of-day price, the stock will print a bearish Marubozu candlestick, which could indicate lower prices will come again on Thursday.

If that occurs, bullish traders will either want to see FuelCell form a bull reversal candlestick prior to printing a lower low or  see FuelCell hold the $3.30 level to print a double bottom pattern.

• If FuelCell starts to bounce up later on Wednesday and form a lower wick, the stock will print a hammer candlestick, which could indicate the higher low is in and FuelCell will bounce higher on Thursday.
• If that happens, traders can watch for a possible uptrend to take place or for the stock to consolidate into a tightening pattern for a number of days before choosing the next direction.
• 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. FuelCell’s 50-day simple moving average (SMA) crossed below the 200-day SMA in June 2021, which caused a death cross to form and the stock has been in a bear cycle since then.
• FuelCell has resistance above at $4 and $4.52 and support below at $3.36 and $3.15.

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