All Systems Go as Ballard Power Stock Breaks Out

Ballard Stock
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BLDP Stock: Wheels Are in Motion, Expecting Higher Stock Prices

I am returning to focus on Ballard Power Systems Inc. (NASDAQ:BLDP) stock because there have been some important developments since my July 20 report, “Ballard Power Stock Is Ripe for a Bullish Run.” In that report, I outlined that a number of technical indications were suggesting that a move to the upside in BLDP stock was setting up to occur.

To quickly clarify for those who have not frequented my reports in the past, I generate my views on an investment by analyzing the company’s stock chart. This method of investment analysis is called technical analysis, and it is based on the notion that historical price and volume data points can be used to speculate on what the future may bring.

This method of analysis is suggesting that the future is bright for Ballard Power stock because a very influential and powerful technical price pattern that was in development on the BLDP stock chart is now complete, and it carries significant bullish implications.

The following Ballard Power stock chart illustrates the completed technical price pattern and the price action that preceded it.

Ballard Power stock chart

Chart courtesy of StockCharts.com

The BLDP stock chart highlights a very distinctive wave structure known as constructive price action. Constructive price action consists of impulse waves and consolidation waves.

The impulse waves, which are highlighted in green, serve to define the stage in a bullish trend when the stock price stages a swift and linear advance. This wave is where much of the gains are captured.

The consolidation waves, which are highlighted in purple, serve to define the stage in a bullish trend when the stock price is confined to a range. This price action serves to unwind overbought conditions that were created during the impulse wave that preceded it. This price action creates the necessary conditions so a new advancing impulse wave can develop.

These waves feed off each other and, therefore—in an alternating wave structure—these waves create the necessary environment where a trend can sustain itself and flourish. This particular wave structure has been in development since 2016, when BLDP stock was trading at $1.23. This investment is currently trading at $3.36, representing a 173.17% return over that time frame. The good news is that the wave structure supports further gains for Ballard Power stock.

The completed technical price pattern I was referring to is a symmetrical triangle, which is a type of consolidation wave. This pattern is identified by the price action that contains a series of higher lows and lower highs and, as time progresses, the range between these highs and lows continues to contract. This pattern is best identified by using two converging trend lines that connect each respective low and each respective high. These trend lines define levels of price support and price resistance.

Symmetrical triangle consolidation waves are particularly powerful price patterns because energy is stored within the pattern as it develops. The longer it takes for this pattern to develop, the more energy that is stored within it. The stored energy is finally released when the stock price exits the pattern by breaking above resistance or below support. The symmetrical triangle was just completed on August 31, when Ballard Power stock broke out of this pattern.

This breakout is suggesting that the consolidation pattern is complete and, therefore, an impulse wave is now in development. As a result, BLDP stock is now expected to stage an advance.

Given that the consolidation pattern was in the form of a symmetrical triangle, it reinforces and suggests that much higher BLDP prices are now on the horizon. It is only a matter of time before Ballard Power stock is forging new 52-week highs.

Analyst Take:

Ballard Power stock has recently completed a technical price pattern which is suggesting that a very powerful move is now in development. This technical price pattern is part of a larger wave structure that has been supporting the bullish advance in BLDP stock.

These bullish indications suggest that it’s only a matter of time before new 52-week highs are forged. Therefore, the only prudent view on this investment is a bullish one.