Plug Power stock price has spent the last two years in a narrow range between the key support and resistance levels at $0.7147 and $4.63. This prolonged consolidation could be a sign that it is about to explode higher in coming months, potentially to the upper side of the channel.
Plug Power stock Wyckoff Theory suggests a comeback is possible
One potential catalyst for the Plug Power stock price is that it may be in the accumulation phase of the Wyckoff Theory. This phase is characterized by sideways movement and low volume.
The accumulation phase is then followed by the markup phase, where demand is usually elevated. It is normally sparked by a major fundamental catalyst such as a revenue and earnings beat or a major partnership.
Some popular companies have gone through this phase in the past few months and exploded higher. A good example is Avis Budget, which moved from nowhere and jumped by over 300% within a few weeks.
Another good example of this is Bloom Energy, which remained inside a narrow range since its IPO in 2018. It then made a strong bullish breakout last year as it became a popular name in the data center industry.
Therefore, if Plug Power replicates the same performance, there is a likelihood that it will go parabolic and hit the key resistance level at $4.63, which is about 45% above the current level.
A move that level will point to more gains, potentially to the 23.6% Fibonacci Retracement level at $7.92, up by 180% above the current level.
Plug Power stock | Source: TradingView
Plug Power’s business is making some improvements
There are signs that Plug Power’s business is making a turnaround even as potential risks remain.
The most recent financial results showed that the company’s business is growing, with its revenue growth coming in at 12.9% to $710 million and its gross profit moving from minus 122.5% to 2.5%.
A key catalyst that may fuel its growth in the future is the ongoing artificial intelligence buildup that has led to a substantial increase in energy demand.
For example, it recently made several deals worth over $275 million. These deal are about asset monetization, which will help to boost its growth in the coming years. At the same time, it has restructured its debt, which is expected to see it pay smaller interest payments in the long term.
Analysts are optimistic that the company’s growth will continue in the coming years now that its hydrogen plants are in operation. The average estimate among analysts is that its revenue will be $803 million this year, up by 13% YoY. It will be followed by $948 million, up by 18% next year.
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