Mish’s Daily: Does Plug Power Have Any Power to Rally?
Mish’s Daily: Does Plug Power Have Any Power to Rally?
Written by Michele ‘Mish’ Schneider
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 fundamentals are promising.
Thirdly, I see a bullish divergence in momentum and a reversal bottom ion 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.
What are the biggest challenges Plug Power faces in scaling its hydrogen infrastructure?
- 1. High Production Costs –Plug Power needs to scale production while reducing costs to remain competitive with fossil fuels and other energy alternatives.
- 2. Hydrogen Supply Chain & Distribution –Transporting and storing hydrogen is complex, requiring specialized infrastructure.
- 3. Infrastructure Buildout – The current hydrogen infrastructure, including refueling stations and production facilities, is still in its early stages.
- 4. Regulatory & Policy Uncertainty –Uncertainty around regulations, subsidies, and carbon pricing can impact Plug Power’s ability to secure long-term investments and growth.
- 5. Technology & Efficiency Improvements –Plug Power must continue investing in R&D to enhance its competitive position.
- 6. Competition & Market Adoption –The company must navigate competition from firms investing in alternative renewable energy sources.
- 7. Profitability & Financial Sustainability – While Plug Power has aggressive expansion plans, it has yet to achieve consistent profitability.
- 8. 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.
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.
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.
Educational purposes only, not official trading advice.
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(Pivotal means short-term bullish above that level and bearish below)
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Semiconductors (SMH) 245 support 260 resistance
Transportation (IYT) 71.40 support 73.50 resistance
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Retail (XRT) Middle of the 2025 range
iShares 20+ Treasury Bonds (TLT) Above the 50-DMA and needs to clear 90 to get interesting
20250220
