Room for Downward Retracement after Earnings
FCEL saw impressive growth from the beginning of November, and very briefly tested a previous support/resistance zone (from 2017). I'm skeptical as to how much further upside potential exists with FCEL in the short-term. I actually found a really interesting article written in December which analyzed FCEL's profitability in comparison to it's recent price movement. (Hake, Mark R. "Fuelcell Energy May Never Be Profitable, But It's Stock is Still Up Big.") -Feel free to Google that title-
In it, the following excerpt was used from FCEL's 10-Q SEC filing (for the period ending July 31, 2020.)
“…We have not been profitable since our year ended October 31, 1997. We expect to continue to incur net losses and generate negative cash flows until we can produce sufficient revenues and margins to cover our costs. We may never become profitable. Even if we do achieve profitability, we may be unable to sustain or increase our profitability in the future.”(Hake, Mark R. "Fuelcell Energy May Never Be Profitable, But It's Stock is Still Up Big.")
While PLUG has released important news recently regarding it's partnership with Renault and the $1.5 billion deal with the SK Group, FCEL's price seems to have been stimulated by speculation about the renewable energy sector. Additionally, JP Morgan downgraded FCEL, reasoning that the stock is currently overpriced.
With earnings happening tomorrow, I am expecting that price action will descend down towards the 50EMA / .382 retracement ($ 13.50)(Shown on the chart are Fibonacci retracement levels from the first week of November). Alternatively, if price can continue higher, there is still the support/resistance zone near $20 which could prove to be an important resistance zone.
Comments are always welcomed!
In it, the following excerpt was used from FCEL's 10-Q SEC filing (for the period ending July 31, 2020.)
“…We have not been profitable since our year ended October 31, 1997. We expect to continue to incur net losses and generate negative cash flows until we can produce sufficient revenues and margins to cover our costs. We may never become profitable. Even if we do achieve profitability, we may be unable to sustain or increase our profitability in the future.”(Hake, Mark R. "Fuelcell Energy May Never Be Profitable, But It's Stock is Still Up Big.")
While PLUG has released important news recently regarding it's partnership with Renault and the $1.5 billion deal with the SK Group, FCEL's price seems to have been stimulated by speculation about the renewable energy sector. Additionally, JP Morgan downgraded FCEL, reasoning that the stock is currently overpriced.
With earnings happening tomorrow, I am expecting that price action will descend down towards the 50EMA / .382 retracement ($ 13.50)(Shown on the chart are Fibonacci retracement levels from the first week of November). Alternatively, if price can continue higher, there is still the support/resistance zone near $20 which could prove to be an important resistance zone.
Comments are always welcomed!
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