FuelCell Stock Up 35% in November – Time to Buy FCEL Stock?
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The price of FuelCell stock has gone up nearly 35% so far in November following a strong October in which shares rose another 19% as a result of a positive earnings report covering the third quarter of the 2021 fiscal year.
Congress’s passing of Joe Biden’s infrastructure bill seems to be the primary reason behind this pronounced uptick in FuelCell stock this month as the share price advanced 20.8% following the approval of this $1.2 trillion landmark legislation.
It is important to note that a total of $7.5 billion have been earmarked for the acquisition of eco-friendly vehicles while another $7.5 billion will be destined to strengthen America’s electric vehicle charging infrastructure.
Even though FuelCell does not have a product that will directly benefit from this budget, market participants seem to be following one of Wall Street’s oldest adages: “A rising tide lifts all boats”.
In this regard, FuelCell may benefit to some extent by the funding the government is ready to deploy either in the form of grants or a collaboration that may boost the company’s top-line in the future.
What can be expected from FCEL stock as we enter the last quarter of 2021? I’ll attempt to answer that question by assessing the price action and fundamentals of this renewable energy stock.
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FuelCell Stock – Technical Analysis
In a previous article about FuelCell, I highlighted that the outlook for the stock was bullish as long as the price broke above the $8.3 threshold since this would result in the confirmation of the falling wedge pattern highlighted in the chart.
It seems that this is exactly what has happened thus far as the stock accumulates a 24% gain since 18 October – back when the price first closed above this level.
On that day, trading volumes were particularly high as they exceeded the 10-day average by nearly 5 times as the stock advanced nearly 20% in a single session.
Meanwhile, the price has remained above its short-term moving averages since then and this emphasizes that the rally is still alive and well. For now, momentum oscillators are pointing to the continuation of this bull run as the Relative Strength Index (RSI) seems headed to make a higher high while the MACD has continued to climb to higher positive levels while accompanied by steadily increasing positive histogram readings.
Yesterday, the price broke above the 200-day simple moving average. In the following days, the price must remain above that threshold for the price to continue advancing. Otherwise, chances are that a rejection of this threshold may lead to a swift correction in the price of FCEL stock.
On the other hand, if a break of the 200-day SMA occurs, the next resistance to watch would be found at the $12.5 area.
FuelCell Stock – Fundamental Analysis
No relevant change to the fundamental situation of FuelCell has occurred since I last wrote about the company. The pad in the back that the bill gives to the sector by including a component that seeks to ramp up the existing infrastructure is positive news but it is still unclear how FuelCell will benefit from this.
It is important to note that FuelCell stock is being held by at least 59 different exchange-traded funds (ETF) that track the renewable sector and other strategies.
For example, the iShares Russell 2000 ETF (IWM) holds 7.3 million shares of the company while the iShares Global Clean Energy ETF (ICLN) holds another 5.41 million as per data from ETF.com.
Inflows toward these vehicles may lead to higher demand for FuelCell stock as fund managers will be forced to acquire more shares to maintain their percentage allocation on this particular stock.
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