FuelCell Energy, Inc. (FCEL) shares rose more than 3% as President Biden’s pro-environment agenda offset weak fourth-quarter financial results that fell short of expectations.
Key points to remember
- FuelCell Energy shares rebounded after President Biden decided to join the Paris climate accord and signed a series of executive orders.
- The move came despite worse-than-expected fourth quarter financial results and concerns over the Evaluation fuel cell stocks.
- FuelCell Stock Approaches Overbought Levels, May See Lower moving average convergence divergence (MACD) short-term crossover, suggesting consolidation ahead.
The company reported fourth-quarter revenue that rose 54% to $17 million, missing consensus estimates of $50,000, as well as a net loss of eight cents per share, or four cents per share. share less than consensus estimates. In addition to lackluster results, Kerrisdale Capital recently shorted Plug Power Inc. (PLUG) – a peer in the fuel cell space.
Despite these bearish developments, President Biden’s decision to join the Paris Climate Accord and a series of executive orders designed to tackle climate change – issued hours after inauguration – have helped propel solar companies and higher biofuels.
From a technical standpoint, the stock rebounded from reaction lows in Thursday’s session. The relative strength index (RSI) remains just below overbought levels with a reading of 62.87, but the MACD could see a short-term bearish crossover. These indicators suggest the stock may have a bit more room to maneuver, but the medium-term picture remains much murkier and could turn bearish.
Traders should watch for consolidation over the next few sessions ahead of a potential decline. If the stock breaks down from the trendline resistancetraders could see a move towards the trendline Support at around $13.00. If the stock rebounds from current levels, traders could see a retest of the highs at $20.94 or a move towards trendline resistance closer to $24.00.
Short sale is an investment or trading strategy that speculates on the decline in the price of a stock or other security. This is an advanced strategy that should only be undertaken by experienced traders and investors.
Shares of FuelCell Energy rose during Thursday’s session. While the company reported worse-than-expected fourth-quarter financial results, President Biden’s decision to join the Paris climate accord and a flurry of executive orders offset the weakness. The stock could see some consolidation in the coming sessions given its high RSI and very heavy MACD readings.
The author does not hold any positions in the stocks mentioned, except through passively managed index funds.