Plug Power Inc PLUG was up 6.5% to start the trading day on Tuesday, moved back down to nearly fill the gap, then surfaced above the opening price.
The move higher is the first indication that Plug is reversing into an uptrend after trading in a downtrend between April 4 and Monday, where the stock bottomed at $24.72.
An uptrend occurs when a stock consistently makes a series of higher highs and higher lows on the chart.
The higher highs indicate that the bulls are in control, while the intermittent higher lows indicate periods of consolidation. Traders can use moving averages to identify an uptrend, with rising shorter moving averages (such as the eight-day or 21-day exponential moving averages) indicating the stock is in a steep shorter-term uptrend and rising moving averages in the longer term. (such as the 200-day simple moving average) indicating a long-term uptrend.
A stock often indicates when the higher high has been reached by printing a reversal candlestick, such as a doji, bearish engulfing, or hanging man candlestick. Likewise, the higher low can be signaled when a doji, morning star, or hammer candelabra is printed. In addition, the higher tops and higher tops often occur at resistance and support levels.
In an uptrend, the “trend is your friend” until it isn’t, and in an uptrend there are ways for both bullish and bearish traders to participate in the stock:
Bullish traders who already have a position in a stock can rest assured that the uptrend will continue unless the stock hits a lower low. Traders looking to position themselves in a stock trade in an uptrend can usually find the safest entry into the higher low. Bearish traders can enter the trade at the higher high and exit at the pullback. These traders can also come in when the uptrend breaks and the stock makes a lower low, indicating that a reversal in a downtrend is in the cards.
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The Plug Chart: On Monday, Plug pressed a hammer candlestick on the daily chart, indicating a reversal to the upside was likely. The reversal was strong enough for Plug to push a high above the most recent lower high, which was printed at the USD 27.46 level on April 12.
If Plug continued to move higher on Tuesday, the eight-day exponential moving average (EMA) will break above 21-day, both of which Plug regained as support. If that happens, Plug may have enough strength to regain the 200-day moving average as support, suggesting that long-term sentiment in the stock has turned bullish. On Tuesday, Plug traded at above-average volume, indicating that the stock is once again in high demand. At the time of going to press, approximately 21 million Plug shares had been exchanged, compared to the 10-day average of 16.91 million. If Plug Power closes the trading day near its highest price, it will print a second consecutive hammer candlestick, which may indicate that higher prices will come again on Wednesday. If the stock closes the trading day flat or toward the low, it will print a doji or inverted hammer candlestick, which could indicate lower prices are in the cards and traders can watch to see if the stock prints a higher low. all time low. Plug has resistance above $28.80 and $34.48 and support below at $26.87 and $24.40.
See also: Why Plug Power Shares are soaring
This post Plug Power Charges Ahead, But Can The Stock Break This Indicator?
was original published at “https://www.benzinga.com/trading-ideas/technicals/22/04/26694555/plug-power-charges-ahead-but-can-the-stock-break-through-this-indicator”
