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Alternate Energy Plays On Fire: How To Trade Them Now

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March 10, 2014 – Comments (1) | RELATED TICKERS: PLUG

Stocks like Plug Power Inc (NASDAQ:PLUG), FuelCell Energy Inc (NASDAQ:FCEL) and Ballard Power Systems Inc. (NASDAQ:BLDP) continue to be on fire. PLUG is up another 32% today, trading at $10.94 +2.67 (32.29%). Just in the last two weeks, it is up almost 200%. When these stocks get this extended, I begin to salivate and look to short them. It is often a high risk trade so I short with options or lighter share size. PLUG has crossed the $10 even number level, this is a psychological level that will create sellers (once the short squeeze is over). In addition, the stock is now worth over $1 billion, another psychological selling level (once reality sets back in). I think it is also important to mention that the stock is in need of capital. This drastic price move will give them the ability to do a stock offering at a solid price. This stock offering will cause dilution to current shareholders and could be the catalyst for a pull back.

In my opinion, the stock will fall in the coming weeks to $7.00 before finding support. 

Disclosure: I am short Plug Power Inc (NASDAQ:PLUG).

Gareth Soloway
InTheMoneyStocks

1 Comments – Post Your Own

#1) On March 10, 2014 at 2:41 PM, Turfscape (41.66) wrote:

Gareth, Plug Power has already priced and placed their next registered offering of a little under 4 million shares.

The stock will fall because the top end of the price is currently wild speculation, and profit-taking is inevitable. But the further dilution is already factored in.

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