Plug Power Inc: Can Plug Stock Replicate its 9,803% Return?

PLUG stockPLUG Stock: Will History Repeat?

I am keeping a close eye on Plug Power Inc (NASDAQ:PLUG) stock because this ticker is notorious for price surges. The company has a history of lulling investors into a coma and then, all of sudden, out of nowhere, its shares wake up and go on an incredible run. The previous return from such an instance was simply ridiculous.

I am by no means saying that PLUG stock will surge tomorrow; absolutely not. I am watching this play because there is always a possibility that such a run can reoccur, and I want to be there watching when it happens.

My view on PLUG stock is currently neutral, as the chart is once again lulling investors to sleep, and perhaps into another coma. I will try to outline the criteria that I believe Plug Power stock will need to overcome in order to allow the possibility of another run.

The following chart illustrates the previous epic run in Plug Power stock.

plug-power

Chart courtesy of StockCharts.com

The epic run in PLUG stock began in 2013. That year started off slow, as the stock price declined and bottomed in February at $0.12 a share. Thirteen months later, the price peaked at $11.41 a share. This run represented an unimaginable—and phenomenal—return of 9408.33%. I could only dream of such wild returns. Perhaps this is why PLUG stock remains on my watch list many years later.

The following chart illustrates the predominant trend in PLUG stock.

plug

Chart courtesy of StockCharts.com

There are two parallel lines that define this trend. The pattern is known as a descending channel. A descending channel has two trend lines that define the upper and lower bounds. The share price oscillates between these two lines for as long as the trend permits. A trend reversal will occur when shares finally gather enough strength to break out of this channel.

This pattern is almost three years in length. Long patterns are more significant than smaller ones and, on average, outperform when a reversal is confirmed. Plug Power stock needs to close above the upper trend line to confirm that a trend reversal is in play. This would mark the first step needed for the stock to make an attempt at a run at higher prices.

The following Plug Power stock chart illustrates a potential reversal that may develop.

plug2

Chart courtesy of StockCharts.com

Plug Power stock has the potential to put in a double bottom. A double bottom is a reversal pattern that appears at the end of trend. It is marked by two consecutive bottoms, separated by a peak in between. The pattern is confirmed when the shares close above the peak that separates the two bottoms.

Plug stock is far from putting in a double bottom, as the peak price that need to be overtaken sits at $2.30. But this pattern will serve as a second bullish indicator, as any attempt at the peak would mean that the descending channel has already been broken.

Double bottom patterns are also of great benefit because, not only do they signal a change in trend, but they also produce a possible price objective. This reversal pattern projects a potential price target of $3.20, but lets not get ahead of myself; the pattern is only a possibility at this point.

If this pattern does come into play and is resolved in a bullish manner, that would mean two coinciding bullish patterns triggered bullish signals. In my world, that is referred to a “double buy” signal, and many great runs have begun on a similar footing.

Last Words on Plug Power Stock

My current bias on Plug Power stock is neutral, but I am on the lookout for signals to change that bias. If PLUG stock can pull off a “double buy” signal from the two distinct patterns highlighted above, there might be enough bullish momentum to get this stock moving again.