Updated: Jan 13, 2022
Today's analysis will be on Plug Power. Plug Power is an American company that develops hydrogen fuel cell systems used in conventional batteries and electric vehicles. Of course, the Biden administration is focusing on clean and sustainable energy infrastructure and the rising electric vehicle market is definitely good news for PLUG in a long term. However, since this analysis is focusing on short/medium-term swing trading, this analysis will mainly cover technical analysis.
The chart above is the daily candle of PLUG. The first thing you can see from the chart above is the green hammer candle with greater volume meaning that this can be a potential upcoming trend reversal.
Looking at a longer weekly candle, we can see a Doji candle forming around a year-long support level of around $23.50, and a daily green hammer bouncing from this strong demand zone.
Ultimately looking at the Fibonacci drawn at the 1st Range Boundary (exceptional low far below the moving averages) and the 2nd Range Boundary (Regional high after the 1st Range Boundary), we can see that candlesticks have bounced a couple of times at the "Golden Fibonacci Level," including Monday's bounce at this level.
Our first price target will be the main support/resistance level around $27.20, and our second price target will be the next major demand zone at $29.70s. Though the $2 upward move may not seem significant, keep in mind that the current share price of PLUG is $25, and the $2 move is approximately a 10% upward movement.
My stop loss will be just below the hammer bounce level as if the candlestick breaks downward of the strong support zone around $23.40, then there is potential to continue its downtrend. Still, with a Risk/Reward Ratio of 2.5, this is not a bad trade.
Updated (Jan 13)
I would like to provide you with an update on yesterday's PLUG Analysis. PLUG had a red day yesterday, but it's still within my game plan. It has bounced from another key support level at $24.40 and with this trend, I can view three possible scenarios.
Touches and bounces from the $24.40 support zone again, and this triple rejection further confirms the trend reversal
Breaks down the support level but bounces at the $23.50 support zone
Breaks down both of the support levels and hits the stop loss
However, the third scenario is highly unlikely since it needs to break down two strong support zones. I doubt that the selling side has enough momentum to do so.
In short, nothing has changed from my game plan yesterday.