FuelCell Charges Higher With Plug Power, Sunrun: What's Next?

FuelCell Energy, Inc FCEL rallied 8.6% on Thursday along with several other clean energy stocks such as Plug Power, Inc PLUG and Sunrun, Inc RUN, which rallied 8.1% and 7.7%, respectively.

For technical traders, there were signs FuelCell was charging up for a run north due to patterns that had developed on the stock’s chart.

See Also: Why Plug Power Analysts See A Margin Improvement Story With Outsized Growth Prospects

The FuelCell Chart: FuelCell began trading in an uptrend on Oct. 6, making a consistent series of higher highs and higher lows on the daily chart. FuelCell’s most recent high lower falls at the Nov. 5 low of $8.68. On Thursday the stock made another higher high above Monday’s high of $11.22, which confirms the uptrend is intact.

On Thursday, FuelCell broke up bullishly from a quadruple inside bar pattern, with the mother bar printed on Monday and each of the subsequent inside bars within the range of the previous day’s candle. When a stock breaks up from an inside bar, on high volume, it’s an indication a rally may be in the cards.

FuelCell has two gaps below with the closest gap falling between $9.28 and $9.45 and the lower gap between the $8.06 and $8.25 range. Gaps on charts fill about 90% of the time, so it’s likely FuelCell will fall down to fill both gaps in the future, although it could be an extended amount of time before that happens.

FuelCell’s relative strength index (RSI) may also cause concern for bullish scalp traders because it’s running hot at about 70%. When a stock’s RSI reaches or exceeds the 70% level, it becomes overbought, which can be a sell signal for technical traders.

FuelCell is trading above the eight-day and 21-day exponential moving averages (EMAs), with the eight-day EMA trending above the 21-day, both of which are bullish indicators. The stock is also trading above the 50-day simple moving average, which indicates longer-term sentiment is bullish.

Want direct analysis? Find me in the BZ Pro lounge! Click here for a free trial. 

• Bulls want to see sustained big bullish volume drive FuelCell up above a resistance level at $11.72 while keeping in mind the stock will need to print a higher low eventually. Above the level, there’s further resistance at $12.70 and $13.91.
• Bears want to see big bearish volume drop FuelCell down below a support level at $10.58. If the stock falls below the level, it could fill the closest gap and fall under another support at $9.43.