Technical Analysis: Dead Cat Bounce or Long-Term Reversal for FuelCell Energy?

FuelCell Energy, Inc. (FCEL) Stock Advances with Impressive Surge and Bullish Momentum

FuelCell Energy, Inc. (FCEL) saw a significant increase on Friday morning, with its stock shooting over 6% higher at one point.

The continuance of bullish momentum following the rejection of a bear flag formation on Wednesday was credited with this upward trend.

The stock of FuelCell Energy has recently been doing admirably, increasing by around 20% since July 7.

Positive market sentiment and a lower-than-expected June inflation report have helped (FCEL) increase 20% since July 7.

This extraordinary gain can be ascribed to the market’s general strength, which was bolstered by a June inflation report that was less than anticipated.

Metric

Value

Symbol

FCEL

Current price

$4.85

Change

+6.75%

Previous close

$4.56

Market cap

$1.2 billion

Volume

3.2 million

Day range

$4.56 – $5.15

Analyst’s note

The stock has surged about 20% since July 7 amid general market strength caused by a lower-than-expected June inflation report.

A business that specialises in fuel cell power plants and renewable energy options is called FuelCell Energy, Inc.

Investors have been paying attention to its stock as a result of its impressive performance and upbeat market tone.

Reversal and potential change in momentum are experienced by FuelCell Energy, Inc. (FCEL), raising the possibility of a long-term reversal.

On July 14, FuelCell Energy, Inc. (FCEL) had its previous session rise reverse, resulting in the stock dropping to around flat levels.

This signifies a possible shift in momentum and that the local peak may have been achieved.

The shares of FuelCell Energy has had a precipitous decrease of almost 92% after reaching an all-time high of $29.44 on February 10, 2021.

This significant decline increases the likelihood that the stock may have a longer-term turnaround.

Alternately, the current rising trend can be explained by a dead cat bounce, a brief comeback that frequently turns out to be a bull trap.

Using the Descending Trend Line to Break It in Order to Predict Long-Term Results

The ability of the stock to break up from a declinating trend line that has been applying downward pressure since February 3 will probably determine the final result, whether it’s a longer-term reversal or a brief bull trap.The shares of FuelCell Energy has been seeing substantial resistance at this trend line.

A declining trend line acts as resistance and suggests that even if the price is falling, there are more sellers than buyers in the market.

A trend line must have at least three touches by the stock price to be considered genuine.

The trend line’s strength, however, weakens as more touches are made.

Possible Reversal, but Uptrend Confirmation Is Still Needed

Let’s now examine the chart for FuelCell Energy, Inc. (FCEL).

Despite the fact that FCEL was able to reverse its prior decline, the company has not yet demonstrated a fresh uptrend on the daily chart.

FCEL must create a higher low above the most recent lower low of $2, which was seen on July 6, in order to start a new uptrend.

If FCEL closes below the $2.50 level, a potential Doji or shooting star candlestick formation might form.

The stock’s upward advance may not be sustained or cemented in the absence of a higher low above the prior low.

Investors and traders are keeping a careful eye on FCEL’s price activity to see if it can make a higher low, which would signify a more definite turn from bearish to bullish.

A doji or shooting star candlestick will develop if FuelCell Energy, Inc. (FCEL) ends the trading day below the $2.50 mark, which might indicate the occurrence of a local peak and suggest a probable pullback on the following Monday.

Bullish Traders Watching for FuelCell Energy, Inc. (FCEL) Support Levels and Potential Reversal Signals

Bullish traders might keep an eye on the stock for the potential creation of a bullish reversal candlestick, such as a doji or hammer candlestick, if FCEL keeps losing value in the following trading days.

This would imply a larger chance of a higher low forming and a confirmation of the uptrend.

Several moving averages, such as the 50-day simple moving average, the eight-day and 21-day exponential moving averages, and when a retracement occurs, the 50-day simple moving average, all of which are now around $2.27, may provide support for the company.

Forecasts for FuelCell Energy, Inc. (FCEL): Bullish and Bearish: Uptrend Confirmation and Support/Resistance Levels

Bullish traders are eager for an uptrend to be confirmed, then for FCEL to continue moving up until the stock crosses above the declining trend line.

This trend line’s breach by FuelCell might potentially mark the start of a longer-term bullish cycle.

On the other hand, traders who are pessimistic would want to see FuelCell go below the aforementioned moving averages, which would quicken a downward movement.

Bearish traders would look for confirmation through heavy trading activity whenever the stock fell below these levels, giving them additional assurance that the predicted rise was unlikely to occur.

FCEL has resistance at $2.61 and $2.73 and support at $2.32 and $2.73 in terms of levels of support and resistance.

Related Articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest Articles