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  1. Home
  2. / Investing

Watch and Wait on Plug Power Before Buying

Traders looking to go long PLUG should exercise patience and wait for another period of consolidation.
By BRUCE KAMICH
Oct 12, 2020 | 10:10 AM EDT
Stocks quotes in this article: PLUG, LIN

Jim Cramer told Mad Money viewers Friday night there were two ways to play the hydrogen market. See our thoughts on the first less speculative way . 

 
The second, more speculative way to play hydrogen is with Plug Power ( PLUG) . Cramer said this company has been making hydrogen-powered forklifts for 20 years. The company's products charge significantly faster than their all-electric counterparts and are already in use at major warehouse facilities worldwide. Cramer said Plug Power is more risky than Linde ( LIN) , which is why it should only be bought on a pullback.

Let's check out the charts of PLUG. 

 
In this daily Japanese candlestick chart of PLUG, below, we can see that prices have rallied strongly from a base down around $4. Two lengthy corrections can be seen - the entire month of July and from the middle of August through most of September. Prices are above the rising 50-day moving average line as well as the rising 200-day line.
 
Trading volume shows a decline from late June but the On-Balance-Volume (OBV) line shows a rise over the past six months.
 
The Moving Average Convergence Divergence (MACD) oscillator turned higher at the end of September for a fresh outright buy signal.  
 
 
In this weekly Japanese candlestick chart of PLUG, below, we see a bullish picture. Prices are in an uptrend above the rising 40-week moving average line. The middle of last week's strong white candlestick is likely to act as support.
 
The weekly OBV line just made a new high for the move up to confirm the price gains. The MACD oscillator is in a bullish alignment above the zero line. 
 
 
In this daily Point and Figure chart of PLUG, below, we can see a potential price target in the $34-$35 area. 
 
 
 
In this weekly Point and Figure chart of PLUG, below, we can see a much less ambitious price target of $22.75.
 
 
Bottom line strategy: The price of PLUG is up nearly four fold in a little more than four months. Traders looking to go long PLUG should exercise patience and wait for another period of consolidation. This could be a sideways period of action or it could be a pullback/decline.
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TAGS: Investing | Stocks | Technical Analysis | Trading | Industrials | Mad Money

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