FuelCell Energy Stock Price and Forecast: FCEL needs charging as bulls run out of steam power

FuelCell Energy (FCEL) shares paused to recharge on Wednesday as the stock barely changed, closing out the session at $9.48 for a small 0.5% gain. The stock has naturally benefitted from the increased attention on clean energy stocks as this past fortnight we have had the G20 meeting in Rome on climate change and now the COP26 summit in Glasgow. Headlines then a plenty for clean energy companies to benefit from.

Despite all this, BP managed to post some blowout results and start its massive dividend and buyback program, showing things are not yet over for old school energy just yet. FuelCell though is firmly in the good books as it is involved in producing clean energy from hydrogen capture. This means it produces energy with no resultant atmospheric side effects associated with fossil fuel burning.

FuelCell Energy (FCEL) chart, 15-minute

We can see from the FCEL graph above the return generated by an investment in the name just over the last two weeks. An impressive return of nearly 30%, despite a 10% pullback. 

FuelCell Energy (FCEL) stock news

There is not a lot of recent news flow behind this one. Yes, there was the extension of an agreement with ExxonMobil (XOM), but this was an extension of an already in situ agreement. It was nonetheless circulated aggressively on social media.

Rather there has been a growing list of more generally favorable sectoral conditions in force. President Biden is keen on clean energy, and his stimulus bill will have a clean energy provision if he can get it past some skeptical senators. Notably skeptical are ones from fossil fuel states, which have some nice tax revenue from oil exploration that needs replacing.The weight of public opinion should get the bill through eventually, perhaps with some watered-down features. Countries have been making impressive pledges at the COP26 summit this week, which will further benefit the clean energy sector. Climate change is the hot sector, and green money is waiting to invest in the potential winners in the next move. 

FuelCell (FCEL) stock forecast

The FCEL chart gives us a clearer picture of the perfect setup. A combination of the right sector, tailwinds mentioned above, and a technical set up that was waiting for a catalyst. FuelCell was caught up in the original frenzy back in January and had quieted down.

This reduced volatility led to a triangle formation. We then formed a base that prepared us for the breakout test. The first test of $8.30 failed, but the retracement was to a higher low, making it bullish. We also had a bullish divergence from the Relative Strength Index (RSI). The second breakout worked perfectly, and now we find FCEL consolidating after the breakout move. To gain further strength, FCEL shares need to hold above $8.30 and really above $8.93, the first breakout failure.

This will allow buyers time to regroup and push FCEL stock higher. Below $8.30 we are back to neutral and would close our positions. Targets to the upside will be the 200-day moving average at $10.60 and then the high from June at $12.55.

FCEL 1-day chart