Hello, traders and investors. Before I dive into the analysis, please note that I am not a financial advisor, and this is not financial advice.
FuelCell Energy is showing several bullish indicators across different time frames, suggesting a potential for a significant upward move. Here's a refined analysis:
On the 4-hour (4H) chart, there's a noticeable shift in momentum to the upside, indicating a change of character. After a decline to a key support level (referred to as "order block"), the price action formed a double bottom pattern, suggesting a reversal. Additionally, a Bat pattern is emerging, with the ABCD structure signaling potential profit-taking levels at $2.16 (Fibonacci 1.272 extension) and $2.45 (Fibonacci 1.618 extension). The MACD indicator shows a bullish crossover and divergence, complemented by a double bottom in price and a higher low in the RSI, reinforcing the bullish outlook.
On the daily (1D) chart, two significant patterns are observed: a descending triangle and a symmetrical triangle. A decisive break and close above the $1.5 resistance level would confirm a breakout from these patterns, along with a downtrend parallel channel, signaling a strong move to the upside.
I initiated a long position at $1.10, setting a stop loss at $1.05 to mitigate risks from a potential bearish breakout from the descending triangle. My strategy includes taking 50% profits at $1.7, anticipating a possible retest of the breakout level ("crime of the scene") before aiming for a second profit target at $2.4 (Fibonacci 1.618 extension). It's crucial to be cautious around the $2.5-$2.7 levels, as the price may face rejection, underscoring the importance of not being overly greedy in profit-taking strategies.
This analysis is based on current chart patterns and indicators, which suggest a bullish run for FuelCell Energy. However, keep in mind that trading involves risks, and it's important to conduct your own research and consider your risk tolerance when entering positions.