During Monday's fast-paced Lightning Round segment of "Mad Money," one caller asked Jim Cramer about Plug Power (PLUG) . "They report soon and they have to deliver. They've let us down the last few times," replied Cramer about the company that is developing hydrogen fuel cell systems for various markets.
In our July 22 review of PLUG we wrote, "Traders who are long PLUG should consider raising stops to $24 or just selling out their position. There are better opportunities elsewhere."
In this updated daily bar chart of PLUG, below, we can see that prices have remained depressed. PLUG is trading below the flat 50-day moving average line and below the cresting 200-day line. The daily On-Balance-Volume (OBV) line has weakened from late June and tells us that sellers of PLUG have been more aggressive. The trend-following Moving Average Convergence Divergence (MACD) oscillator is below zero line in sell territory.
In this weekly Japanese candlestick chart, below, we can see both the steep rally last year and the big correction this year. Prices are trading below the cresting 40-week moving average line. The weekly OBV line shows improvement the past four months, telling us that buyers of PLUG have been more aggressive. The MACD oscillator is in a bearish alignment below the zero line.
In this daily Point and Figure chart of PLUG, below, we can see an upside price target in the $33 area.
In this weekly Point and Figure chart of PLUG, below, we can see a potential downside price target in the $14 area.
Bottom line strategy: PLUG is expected to report its second-quarter results this Thursday. PLUG could get a bounce to the upside if analysts like the numbers, but the risk is for further weakness and a test of the May low.
