Where the money goes, the technology often follows, Jim Cramer told viewers of Mad Money Wednesday night, as he changed his tune on hydrogen fuel cells.
For years, hydrogen fuel cells have been a sure-fire way to lose money. Tesla's (TSLA) Elon Musk is notorious for referring to fuel cells as "fool's cells" as well as "utterly stupid." But today, Plug Power (PLUG) , makers of fuel cell powered forklifts, raised an additional $845 million, in a deal that was cheered by Wall Street. Shares of Plug Power are also up over 600% for the year. Perhaps, Cramer said, fuel cells aren't a pipe dream after all.
Let's check out the charts of PLUG and see what has changed since October 27 where we wrote that, "PLUG rallied more than five fold from its base pattern, so a longer and deeper correction is not out of character. A decline to the $10 area would not be a surprise to me. Continue to exercise patience before looking to buy." Buyers showed up around $14 so prices did not correct as deep as I had feared or hoped.
In the daily Japanese candlestick chart of PLUG, below, we can see a number of successful tests of the rising 50-day moving average line. All of these tests were buying opportunities. Prices are extended above the rising 200-day moving average line which intersects down around $9.
Trading volume has expanded during the advance and that is a positive as increased volume in an uptrend is a good sign. The On-Balance-Volume (OBV) line has risen to confirm the rally but it looks like the line could be making a small top for now. The Moving Average Convergence Divergence (MACD) oscillator is bullish but has begun to narrow.
In the weekly Japanese candlestick chart of PLUG, below, we can see a large long legged doji or rickshaw man pattern. This top reversal still needs some bearish confirmation. Prices are extended above the rising 40-week moving average line and the OBV line shows hesitation in the past two months.
The MACD oscillator is bullish.
In the daily Point and Figure chart of PLUG, below, we can see that prices have met a price target of $23.44.
In the weekly Point and Figure chart of PLUG, below, we can see a potential longer-term price target in the $31 area.
Bottom-line strategy: PLUG has reached its daily Point and Figure price target but $31 is a new target on the weekly Point and Figure chart (above). Traders looking to go long PLUG should continue to exercise patience with the rickshaw man pattern noted on the weekly candlestick chart. Existing longs should raise stop protection to a close below $20.