FuelCell Energy Inc (NASDAQ:FCEL) and Plug Power Inc (NASDAQ:PLUG) have plummeted about 82% and 62%, respectively, from their all-time highs reached in the first quarter of 2021, despite the SPDR S&P 500 rising about 30% higher since Jan. 4 of this year.
As the 2022 trading year approaches, traders and investors interested in the fuel cell sector may be wondering which stock has more potential to gain value in the upcoming calendar year. Both FuelCell and Plug Power have created trends on the weekly chart that may hint at their future direction, if the trends stay intact.
It should be noted, however, that events such the general markets turning bearish, negative reactions to earnings reports and pessimistic news headlines about a stock can quickly invalidate bullish patterns and breakouts.
As the saying goes, "the trend is your friend until it isn’t" and any trader in a bullish position should have a clear stop in place and manage their risk versus reward.
In The News: FuelCell slid over 13% intraday on Wednesday after the company reported worse-than-expected fourth-quarter results. FuelCell announced revenue of $13.9 million, which missed the consensus estimate of $21.8 million and an earnings-per-share loss of 7-cents, which came in below the estimate of a 4-cent loss.
Plug Power, which has somewhat decoupled from FuelCell’s price fluctuations, was trading flat intraday. Although Plug Power has suffered a massive decline over the past 11 months, it has shown greater strength than FuelCell recently.
The FuelCell Chart: On Wednesday, FuelCell confirmed it is still trading in a weekly downtrend by printing a lower low of $4.83 under the Sept. 13 low of $5.34.
- On the daily chart, FuelCell was printing a doji candlestick, which could indicate at least a bounce is in the cards on Thursday because a doji candlestick is often found at the top or bottom of a trend.
- On the weekly chart, however, FuelCell is working to print a bearish engulfing candlestick pattern, which could indicate the stock is in for more downside next week if it's unable to close the trading week above the $5.77 level.
- Above the level, FuelCell has resistance at $7.17 and $8.31 and below there is support at $4.52 and $3.36.
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The Plug Power Chart: Unlike FuelCell, Plug Power is trading in a weekly uptrend, with the most recent higher low created on Tuesday at the $27.11 mark.
- The stock has been trading above an ascending trendline since reaching a May 11 low of $18.47 and on Wednesday Plug Power tested the trendline as support and bounced.
- On the daily chart, Plug Power was working to print a doji candlestick, which could indicate higher prices will come on Thursday. It should be noted that Plug Power will need to rise above Monday’s high-of-day at $30.43 over the coming trading days to negate the daily downtrend, or the weekly uptrend may fail.
- Plug Power has resistance above at $28.80 and $30.25 and support below at $26.87 and $24.40.
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