FuelCell Energy Dumps on Earnings. Here’s the One Trade Bulls Have Left

Shares of FuelCell Energy (FCEL) – Get FuelCell Energy, Inc. Report are not trading well on the day, down more than 13% so far on Wednesday.

The plunge comes as the company reports a disappointing fourth-quarter result. It’s not unlike what we saw in June with this stock.

FuelCell reported a loss of 7 cents a share when analysts were looking for a loss of just 3 cents a share.

Worse, revenue of $13.94 million declined 18% year over year and missed analysts’ expectations that called for year-over-year growth to $21.55 million in sales.

That’s a pretty wide miss, as analysts were expecting revenue to grow more than 25%.

As a result of the quarter, FuelCell reported a year-over-year increase in losses and a slight year-over-year dip in revenue.

The news is weighing on others in the space, like Plug Power (PLUG) – Get Plug Power Inc. Report, although the stock has mostly recovered its losses from the day.

Regardless, FuelCell stock continues to perform poorly this year. While the stock came into December on a three-month winning streak, shares fell in six of the prior seven months before that.

Even in the month that it did rally — May — shares were only able to eke out a gain of 1.13%.

Trading FuelCell Stock

Daily chart of FuelCell Energy stock.
Chart courtesy of

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I hate to say it for the bulls out there, but there are not many plays left for FuelCell stock to make.

Put another way, there aren’t many reasons to cling to that justify holding a long position in the stock right now.

FuelCell Energy stock is trading below all of its major daily, weekly and monthly moving averages.

The trend is not the stock’s friend right now, but it’s even more concerning that the stock is breaking below the prior low from September, at $5.33.

With that break, it’s struggling to stay above $5, with the new 2021 low down at $4.83, which was set today.

However, there is one play left for those who are searching for a long position in FuelCell stock. That is a reclaim of the $5.33 level.

Back above that level and we could have a bullish reversal to work with, with bulls using a stop-loss just below the new low.

I would feel much better about that setup had the stock declined on good news or a solid report. But this quarter was pretty disappointing and as a result, the selloff seems appropriate.

In any regard, a move back over $5.33 could put the 10-week moving average back in play.

On the downside, watch for a break of the $4.83 low. A close below that could put the $3.50 breakout level back on the table.

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