FuelCell Energy, Inc. (FCEL)

Company

FCEL 1-year chart FCEL 1-year chart

"FuelCell Energy, Inc. based in Danbury, Connecticut, develops and markets ultra-clean fuel cell power plants that generate electricity with higher efficiency than other distributed generation plants of similar size and with virtually no air pollution. Direct FuelCell® (DFC®) power plants combine increased efficiency and reliability to give our customers greater control over their energy costs. Our fuel cells, ranging in size from 300 kilowatts (kW) to 2.4 megawatts (MW), are designed to provide base load power for a wide range of customers, including: wastewater treatment, manufacturing, hotels, hospitals, universities, utilities/ grid support—any company that requires firm, reliable, 24/7 power. FuelCell Energy services over 50 power plant sites around the globe that have generated more than 150 million kilowatt hours, and conducts research & development on next-generation fuel cell technologies to meet the world's ever-increasing demand for ultra-clean distributed energy." (company website)

FCEL 6-month chart
FCEL 6-month chart

Buy

FuelCell Energy popped up in a screen a few months ago, and I've been watching it ever since. It tends to be very volatile, with dramatic moves. Nevertheless, the chart is forming the higher-highs and higher-lows pattern that defines an uptrend. In late March it got a big boost from a string of positive news, and is being boosted again today by a news story (see sidebar).

  • Price momentum (PPO) — slowed sharply after last price jump
  • Relative strength (RSI) — increasing again after a long period of weakening
  • Trend (ADX) — fairly strong, and although selling pressure (-DI) is above buying pressure (+DI) they are moving toward a crossover
  • Volume — steadily increasing over past six months

Based on technical analysis, MarketEdge calls FCEL an "avoid" in a "strong downward trend."

This is definitely one of the riskier investments I've made lately. I am betting that I have timed the beginning of a new up-cycle and that an uptrend really is forming. This is also what can be categorized as a "socially conscious" investment in a company working on alternative energy technology.

Sell

gain Bottom line
2%

I was elated when FCEL broke above the 50-day moving average and tested the 200-day moving average, but MarketEdge has been calling FCEL an "avoid" ever since I bought it and I put a stop-loss order in place to trigger if the price fell too much again. The order triggered today.

I'm not sure if FCEL fell today on its own accord or was dragged down by a sour market today (Nasdaq is down almost 30 points right now). Alternative energy stocks are inherently risky and volatile, but I'd like to invest in them. Perhaps an ETF would let me dabble in that sector while spreading the risk beyond a single company.