Plug Power stock: technical analysis points to a big dive soon

Plug Power stock price remained in a bear market after plunging from a high of $4.58 in October last year to the current $2.05. It has slumped by over 55%, with the market capitalization dropping from $4.9 billion to the current $2.85 billion. This article conducts a technical analysis on the stock and what to expect.

Plug Power stock price forecast: Technical analysis 

The daily timeframe chart shows that the PLUG stock price has crashed from a high of $4.58 last year to the current $2.05. It has remained below the 50-day and 100-day Exponential Moving Averages (EMA), a sign that bears are in control.

The stock has also remained below the Supertrend indicator. It also dropped below the Strong, Pivot, and Reverse levels of the Murrey Math Lines tool at $2.35. 

Plug Power stock is forming an ascending channel and is now in the lower side. This channel is forming after a big drop, meaning that it is forming a bearish flag pattern, a common bearish continuation sign.

Plug Power has moved below the 61.8% Fibonacci Retracement level at $2.17. Therefore, the most likely scenario is where it continues falling, potentially to the Ultimate Support level at $1.57, which is about 21% below the current level. 

On the other hand, a move above the upper side of the channel at $2.65 will invalidate the bearish outlook and point to more gains in the coming weeks. If this happens, the next key target to watch will be at $3.13, the Major S&R Pivot Point of the Murrey Math Lines tool.

Plug Power’s business is facing major headwinds 

Plug Power, a company in the hydrogen energy industry, is facing major challenges as its cash burn accelerates and its biggest business deteriorates. The most recent results showed that its sale of equipment dropped from $107 million in 2024 to $96 million. This is notable as the segment has always been the biggest cash earner.

Plug Power’s losses have jumped, raising the odds that it will continue to raise cash. Its operating loss jumped to over $348 million, up from $216 million in the same period in 2024. Its loss stood at over $704 million in the first nine months of the year, while its net loss jumped to $789 million.

A closer look at the balance sheet shows that it had over $165 million in cash and equivalents, $189 million in restricted cash. Its current assets were over $1.19 billion. Also, the company had $493 million in restricted cash., 

Therefore, the company will likely need to raise cash, which will dilute its investors. It ended the third-quarter with over 1.15 billion in weighted outstanding shares, up from 858 million in the same period in 2024. 

The most fundamental challenge is that demand for hydrogen energy is still limited. While it is a source of clean energy, it is more expensive than others like solar and diesel. 

At the same time, the company has not received major orders in the past few months. This means that its backlog is still low. 

The next key catalyst for the stock will come out today, February 5, when it holds its stockholder meeting. The management will talk about the business, and most importantly, its plans to raise cash.