Bull Signal Flashing for Rebounding Solar Energy Stock

The equity has plenty of technical support on its side

Deputy Editor
Apr 11, 2022 at 1:40 PM
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Solar power name Bloom Energy Corp (NYSE:BE) is up 1.2% at $22.81 this afternoon, as the stock slowly begins to make a recovery from last week's pullback. After a rejection at the $27 mark last Tuesday, BE shed over 8% last week. However, several trendlines look to be keeping these losses in check, including a historically bullish trendline that could speed up the energy stock's recovery time and extend this latest rally attempt.

The trendline in question is BE's 40-day moving average, which the equity just came within one standard deviation of on the charts. According to a study from Schaeffer's Senior Quantitative Analyst Rocky White, five similar occurrences have been seen during the past three years. Bloom Energy stock was higher one month later 60% of the time, and averaged a 19% positive return in this time period. A similar move from its current perch would put BE back above its aforementioned rejection level at $27.14. 

be chart apr 11

An unwinding of pessimism among options traders could also put some wind at the stock's back. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock sports a 10-day put/call volume ratio of 2.54, which sits higher than all other readings from the past 12 months. This means long puts are at their most popular compared to the last year. 

Echoing this, the equity's Schaeffer's Schaeffer's put/call open interest ratio (SOIR) of 1.27 stands higher than 81% of readings in its annual range, pointing to an incredible put-bias among short-term options traders as well. 

A short squeeze could also propel shares higher. While short interest dropped 17.4% in the last two reporting periods, the 14.83 million shares sold short still make up a healthy 9.6% of the stock's available float, or nearly four days' worth of pent-up buying power. 

Bloom Energy stock also looks ripe for a round of upgrades. Of the 11 in coverage, five consider it a "hold," compared to six "strong buy" ratings. 

 




 
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