BLDP Stock: Setting Up to Make a Move
Ballard Power Systems Inc. (NASDAQ:BLDP) stock is an alternative energy play that is focused on hydrogen power. This technology is slowly creeping into our everyday lives, which makes it a very compelling investment to speculate on. Aside from what the company does, it is the BLDP stock chart that has really piqued my interest. There are a number of indications that are currently playing out on the Ballard Power stock chart that are suggesting that this investment is setting up to make a serious move.
This BLDP stock highlights the constructive price action that has supported the stellar advance, where Ballard Power has appreciated to the tune of 81.82% in 2017.
Constructive price action consists of an alternating wave structure that is made up of impulse waves and consolidation waves. Both of these these waves are highlighted with their respective colors on the stock chart below.
The first indication is the structure of the bullish price action that is captured on the following Ballard Power stock chart.
Chart courtesy of StockCharts.com
Impulse waves serve to define the stage in a bullish trend where the stock price stages an advance, while a consolidation wave defines the stage in a trend where these gains are digested.
Every time an impulse wave is in development, the advancing stock price created an overbought condition. In order to alleviate this condition, a consolidation wave is needed because the choppy trading action that follows unwinds the overbought condition, which then creates the necessary conditions upon which a new impulse wave can develop.
These alternating waves feed off each other, which creates the necessary environment for an orderly and sustainable trend to develop.
I am currently enamored with the current consolidation wave that is in development because the triangular price pattern that is being painted on the stock chart is very special. This triangular price pattern is defined using two converging trend lines, where each trend line represents a respective level of support and resistance.
The reason why this pattern is so special is because it is known for its violent reaction once the pattern is finally resolved. This violent reaction is a result of the pattern’s ability to build and store momentum as the patterns develops, releasing it when the pattern is completed. This phenomenon is a direct result of the convergence between support and resistance.
I have the inclination to believe that this consolidation pattern will resolve itself in a bullish manner, which would suggest that another impulse wave will define a BLDP stock price advance. This inclination is being supported by the indication that is highlighted on the following Ballard Power stock chart.
Chart courtesy of StockCharts.com
The indicator I am referring to is located in the lower panel, and it is labeled “MACD.” MACD is an acronym for moving average convergence/divergence, and this indicator is used to determine whether bullish or bearish momentum is dominating the trading action. The distinction between these two is created using the crossing of a signal line.
In February 2013, a bullish MACD cross was generated, indicating that bullish momentum was influencing the trading action, which created a path of least resistance that was geared towards higher stock prices. Ballard Power stock went on to appreciate by 750% before a correction finally ensued.
In November 2014, a bearish MACD cross was generated, indicating that bearish momentum had gained the upper hand. Therefore, bearish pressure was influencing the trading action, creating a path of least resistance geared towards lower stock prices. BLDP stock went on to drop by 53.28% before the share price finally found its footing.
These instances serve to suggest that when this trend-following momentum indicator is engaged, it is wise to trade in the direction suggested by it, because the stock price tends to gravitate in that direction. The most recent indication was a bullish MACD cross, generated in August 2016, and the stock price has since appreciated. This indication remains in bullish alignment, and it is why I believe that the current consolidation wave will resolve itself in a bullish manner, supporting the notion that the bullish run in BLDP stock is set to continue.
Bottom Line on Ballard Power Stock
Ballard Power stock is setting up to make its next move, and I have the inclination to believe that this next move will be to the upside. This inclination is based on a number of indications on the BLDP stock chart, so as a result, I am bullish on Ballard Power Systems until I have reason to the contrary.