Plug Power Rose 560%, Then Pulled Back. What Its Chart Says NowPlug Power, Inc.BATS:PLUGmoomooPlug Power PLUG soared more than 560% between May and October, then the hydrogen-fuel-cell firm gave back some 45% of those gains over the past month. What does PLUG's chart and fundamental analysis say ahead of next week's Q3 earnings report? Let's see: Plug Power's Fundamental Analysis PLUG, which provides commercially viable hydrogen and hydrogen fuel cells for "green" power generation, plans to release Q3 results after the bell on Monday (Nov. 10). The Street is looking for the company to report a $0.13 per share GAAP loss on roughly $176 million in revenue. That would represent an improvement from the $0.24 GAAP loss per share on $173.7 million of revenue that Plug Power reported in the same period last year. However, analysts' consensus revenue estimate has dropped from the $185 million they were forecasting when I wrote about PLUG about a month ago. All in, seven of the 19 sell-side analysts that I know of who cover the stock have lowered their earnings estimates since the quarter began, while seven have raised their numbers lower. (Five have left their estimates unchanged.) That said, Craig-Hellum analyst Eric Stine (who's rated at five stars out of a possible five by TipRanks) reiterated his "Buy" rating on PLUG just last week. (Stine doesn't have a target price for the stock.) However, a short squeeze that I wrote last month could develop for the stock hasn't materialized so far. At last check, about 28% of PLUG's float was being held in short positions, down just slightly from the 31% that I saw a month ago. Plug Power's Technical Analysis Now let's look at PLUG's chart going back some six months and running through Tuesday afternoon: I noted the last time I wrote about PLUG that the stock seemed to be forming a head-and-shoulders pattern of bearish reversal, and the chart above shows that this has only developed further in recent weeks. PLUG gave up more than 25% of its value in the interim, so the pattern proved to be predictive. Readers will see that the stock rallied out of a double-bottom pattern of bullish reversal in September before moving into what now appears to be a nearly completed head-and-shoulders formation of bearish reversal. Marked with three black "humps" at the chart's right, this pattern has a $2.70 pivot. As PLUG breaks below that pivot (shares closed at $2.64 Wednesday), the stock will immediately face a test at its 50-day Simple Moving Average, or "SMA." Denoted by a blue line, the SMA stood at $2.60 in the chart above. Should Plug Power fail to hold that line, the stock might lose the last of any institutional investors who still own the name. Meanwhile, Plug Power's Relative Strength Index (or "RSI," the gray line at the chart's top) is running below neutral, although it's nowhere near technically oversold. Similarly, the stock's daily Moving Average Convergence Divergence indicator (or "MACD," marked with black and gold lines and blue bars at the chart's bottom), looks to have lost its bullish luster as well. The histogram of the 9-day Exponential Moving Average (or "EMA," marked with blue bars) has been running below the zero-bound since mid-October. That's a short-term bearish signal. In the same vein, the stock's 12-day EMA (the black line) is at less than zero and running below the 26-day EMA (the gold line). Although the 26-day EMA is still lingering in positive territory, these are all less-than-bullish signals overall. An Options Option Some options traders might employ what's known as a "long straddle" as a generally inexpensive way to play any in PLUG coming out of next week's earnings. That's a directionless trade where an investor who thinks a stock might move sharply by an option's expiration gets long the same number of puts and calls with the same expiration dates and strike prices. Here's an example: -- Buy one $2.50 PLUG call with a Nov. 14 expiration (i.e., after next week's earnings report). This will cost about $0.29 at recent prices. -- Purchase one Nov. 14 $2.50 put for about $0.19. Net Debit: $0.48. The trader in the above straddle is risking the $0.48 net debit, although it's unlikely that both of these options will be worthless at expiration. If PLUG is trading either above $2.98 or below $2.02 at expiration, the investor should at least break even on this trade. And the further above $2.98 or below $2.02 that the stock goes by expiration, the more profit potential. (Moomoo Technologies Inc. Markets Commentator Stephen "Sarge" Guilfoyle had no position in PLUG at the time of writing this column.) This article discusses technical analysis, other approaches, including fundamental analysis, may offer very different views. The examples provided are for illustrative purposes only and are not intended to be reflective of the results you can expect to achieve. Specific security charts used are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal. This content is also not a research report and is not intended to serve as the basis for any investment decision. The information contained in this article does not purport to be a complete description of the securities, markets, or developments referred to in this material. 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