Plug Power Inc. (NASDAQ: PLUG) shares are trading higher Monday and have reclaimed a support level they once were able to hold.
The stock is now sitting inside a sideways channel that has both strong areas of support and resistance holding. The stock saw a reversal pattern and has bounced back strongly on high volume.
Plug Power was up 13.55% at $25.65 late Monday morning.
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Plug Power Daily Chart Analysis
- The stock looks to have formed a reversal pattern called a double bottom near the $18 level where it found support and has pushed back higher once again. The stock then went on to cross above the $23 level, which is an area where the stock has found support in the past.
- This area may hold as support again in the future now that the price trades above it. Resistance may be found near the $30 level, as it has been somewhere the stock has struggled to hold above in the past.
- The stock crossed above the 50-day moving average (green) Monday but trades below the 200-day moving average (blue). This indicates the stock is entering a period of consolidation. The 50-day moving average may hold as an area of support, while the 200-day moving average may act as resistance.
- The Relative Strength Index (RSI) has been climbing the past couple of weeks and now sits at 56 on the indicator. This is showing that the stock is now seeing more buyers after it was able to cross above the middle line on the indicator. If the RSI can hold above this level it may continue to see bullish movement.
What’s Next For Plug Power? Plug Power is seeing a textbook reversal after bouncing in the double bottom pattern. This reversal could be the start of a nice period of bullish momentum if the stock can keep up higher lows.
Bullish traders want to see the higher lows form and for the stock to be able to cross above the $30 level and continue to push higher after seeing some consolidation above the area. Bearish traders are looking to see the stock start to turn around and fall back below the $23 level. Bears would also like to see the RSI fall below the middle line and show more selling pressure once again.
Photo courtesy of Plug Power.
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