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Home Stocks to Watch Plug Power Just Set a Double Top

Plug Power Just Set a Double Top

The market was closed today, allowing bulls to lick their wounds following Friday’s afternoon plunge. The market initially jumped higher during the last trading session of the week in response to the August jobs report. Then, Russian gas giant Gazprom ruined the party when it announced that gas flows to Europe would be shut down indefinitely.

This rocked equities as investors digested one of the market’s most pressing issues – the ongoing energy crisis in Europe. Soaring energy costs have pushed scores of major European companies to the brink of insolvency over the last week.

Germany’s top toilet paper manufacturer even asked for a bailout earlier today. It’s not even winter, either, which is when the real pain is expected to start as temperatures fall.

Still, many analysts feel that the recent selloff (sparked by Powell’s speech at Jackson Hole) has bottomed and we’re about to experience a huge bullish reversal.

“It’s a combination of people getting a little bit nervous – is there further to go? Are we still in this bottom discovery? But nonetheless, I see support here at 3,900 on the S&P 500,” said Sanctuary Wealth’s chief investment officer, Jeff Kilburg.

Yes, support is still holding at 3,900, but for how long? Following the well-received jobs report on Friday, stocks seemed as though they had successfully bounced off support (blue line) prior to Gazprom’s bombshell.

Now, though, it’s likely that the S&P will touch 3900 again tomorrow. The stochastic indicator remains buried, suggesting that a rebound should soon arrive. But that doesn’t mean the market will avoid falling to the June lows before we see one. Friday’s failed breakout was an absolute momentum killer even if it did happen during a day in which most Wall Street traders were out of the office.

Nonetheless, if the indexes head lower again, stocks like Plug Power (NASDAQ: PLUG) stand to get gouged for major losses. PLUG has done relatively well compared to its peers over the last few weeks but just set a double top and is lingering near support (yellow line).

The stock also closed below its 10 and 20-day moving averages, suggesting a more moderate term downtrend is forming on the bearish reversal formation.

For those reasons, it might make sense to take PLUG short with a trade trigger of $25.34, below support, as the general market fights to stay above its own level of support as well.

Michael James
Michael James has been an avid cryptocurrency trader since the very first Bitcoin was minted. With a background in technical analysis and long-term cycles, he's helped thousands of investors navigate the digital currency markets.


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