January 2021, Plug Power peaked at $75.49.
It now trades at $1.77.
Why does this interest me?
For starters, I love underdogs.
Secondly, the macro fundamentals for the sector are promising.
Thirdly, I see a bullish divergence in momentum and a reversal bottom on the charts.
Plug Power Inc. is an American company that specializes in hydrogen fuel cell technology. Headquarters in the USA, the company develops and manufactures hydrogen fuel cell systems that replace conventional batteries in electric-powered vehicles and equipment.
PLUG has major partnerships with companies like Amazon, Walmart, and Home Depot, supplying fuel cell systems for forklifts and logistics fleets. The company is also expanding into hydrogen production, aiming to create a comprehensive hydrogen ecosystem for clean energy solutions worldwide.
Plug Power is a key player in the push for sustainable energy, working to advance hydrogen as an alternative to fossil fuels in transportation, industrial power, and grid applications.
That said, it’s trading at $1.77 so it carries plenty of risk (to even the best traders). Let’s discuss what the biggest challenges Plug Power faces in scaling its hydrogen infrastructure?
- High Production Costs –Plug Power needs to scale production while reducing costs to remain competitive with fossil fuels and other energy alternatives.
- Hydrogen Supply Chain & Distribution –Transporting and storing hydrogen is complex, requiring specialized infrastructure.
- Infrastructure Buildout – The current hydrogen infrastructure, including refueling stations and production facilities, is still in its early stages.
- Regulatory & Policy Uncertainty –Uncertainty around regulations, subsidies, and carbon pricing can impact Plug Power’s ability to secure long-term investments and growth.
- Technology & Efficiency Improvements –Plug Power must continue investing in R&D to enhance its competitive position.
- Competition & Market Adoption –The company must navigate competition from firms investing in alternative renewable energy sources.
- Profitability & Financial Sustainability – While Plug Power has aggressive expansion plans, it has yet to achieve consistent profitability.
- Renewable Energy Availability – Since green hydrogen relies on renewable energy sources like wind and solar, ensuring a steady and affordable supply of renewable electricity is essential for scaling up hydrogen production.
To overcome these challenges, Plug Power is actively working on expanding its hydrogen production facilities, forming strategic partnerships, and pushing for supportive policies to drive the hydrogen economy forward.
Government action on tax incentives, infrastructure investment, and regulatory support will be crucial in scaling Plug Power’s hydrogen business. That needs to be watched.
But what do we know?
PRICE DICTATES THE NARRATIVE
On the Daily chart going back to September 2024 until February 2025, we see a potential double bottom at $1.60.
That gives this highly speculative stock, a support and risk level (i.e. a trade back below 1.60 would be bearish).
Looking at Real Motion, the red dots are over the 200-DMA (green), while the price is far below. That is what we call a bullish divergence in momentum.
On the Leadership indicator, PLUG underperforms the benchmark.
A classic reversal pattern happens when an instrument makes a new low (60+ days) and then closes above the high of that day on the next day.
With today’s action an inside day (range within the range of the day before), a move and close over 1.85 would be interesting and put this on traders radar.
Twitter: @marketminute
The author may have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author and do not represent the views or opinions of any other person or entity.
