FCEL: Squeeze Candidate

NASDAQ:FCEL   FuelCell Energy, Inc
When a stock has a parabolic move, the pullback tends to be unrelenting but nevertheless organized in a way that presents regular squeeze opportunities. The pullback can lead to an "echo" pop (sometimes before the stock eventually disappears altogether) - or even new all-time highs down the line. It is a pattern to watch for. GME had a similar pattern in 2021 on the hourly chart.

The decline will initially hold the most aggressive moving average, with multiple tests along the way. Then at some point the frequency of the tests will increase or a consolidation just below it will occur where upon the pop will come. A necessary second close above that line will show whether the move has some legs. Often the first test of any strong MA trend, as discussed here, will fail on the second period candle - which presents a good short opportunity with an obvious stop.

The decline may resume but the force of the first moving average will waver and the next moving average will characterize the active resistance level . More tests of this second MA will ensue in a similar way to the first, with the familiar omens suggesting the approaching timing of a pop, like the first. Consolidations between moving averages like the one on GME (between the 20 and 50) are particularly good because they present a clear breakout level or pattern failure. Similarly, when price trades in an organized range directly below or directly above the relevant MA, then that is also a good tell that the stock is being accumulated for manipulation higher. The relevant consolidation will look atypical to the previous tests of the MA, because it obviously won't be rejected in the way as previously shown by that level (i.e. such as trapping one period candles noted earlier).

FCEL's decline has consistent characteristics to this organized pattern and looks ready for a pop. It is also notable for its similar long-term pattern. First level of interest is close however at 4.10. But then the levels to open up to 4.8, 5.8, and 13-14 for the immediate time horizon.

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