Plug Power stock could go parabolic despite the rising short interest

Plug Power stock price has done well in the past few months, helped by its improving financial results and recent deal from Canada.

The stock jumped to $2.70 on Monday, its highest point since November last year.

This retreat happened even as the broader stock market pulled back, with the Dow Jones moving into a correction.

Top reasons why Plug Power stock is rising 

PLUG stock jumped after receiving a major offer from Canada. It will supply electrolyzers for a 275 megawatt green hydrogen project for the Hy2gen Courant. Project.

This is a major deal as the project is one of the biggest decarbonized ammonium nitrate project. 

According to Plug, its scope of work will include advanced engineering and system design activities to support the electrolyzer integration, plant configuration, and performance optimization. It is unclear how much money the company will make eventually.

Plug Power stock has also done well after releasing encouraging financial results, which showed that its revenue continued rising even as its biggest business struggled.

The total revenue rose to $709 million last year, up modestly from $628 million a year earlier.

The sale of its equipment and related infrastructure made $371 million, down from $390 million a year earlier and $711 million in 2023.

Plug Power’s fuel sales rose to $133 million, up sharply from $66.2 million in 2023, while the power purchase agreements made $107 million from $63 million two years before that.

It also narrowed its losses to $1.6 billion from $2.17 billion a year earlier.

Analysts tracking the company believe that the growth will continue in the coming quarters, with the annual revenue expected to rise to $803 million from $709 million last year.

It is expected to make $950 million next year, and possibly cross the $1 billion milestone next year.

The stock is rising as some companies assess whether it can be used to power data centres, which is one of the most booming technologies in the industry.

Still, this is in its early stages, and the cost of hydrogen is still elevated.

Also, the ongoing Plug Power stock surge is likely because of a short squeeze, as it is one of the most shorted companies in the US with a short interest of 23%.

The main risk for Plug Power is that it may need to raise more money later this year, as it ended the quarter with over $368 million in cash and cash equivalents.

Plug Power stock price technical analysis 

PLUG stock chart  |Source: TradingView 

The daily timeframe chart shows that the PLUG stock price has rebounded in the past few weeks.

This rebound started when it moved to a low of $1.72 in March.

It has now jumped above the important resistance level at $2.64, its highest point in January this year.  Also, it has jumped above the 50% Fibonacci Retracement level. 

The stock has risen above the 50-day Exponential Moving Average (EMA), and has formed an inverted head-and-shoulders pattern, a common bullish reversal sign in technical analysis.

Therefore, the stock will likely continue rising in the near term, with the next key target being at $3.10, the 38.2% Fibonacci Retracement level, which is nearly 17% above the current level.