Plug Power Inc (PLUG) and FuelCell Energy Inc (FCEL) are moving in opposite directions after reporting quarterly earnings
Alternative energy stocks Plug Power Inc (NASDAQ:PLUG) and FuelCell Energy Inc (NASDAQ:FCEL) are both fresh off their quarterly earnings reports and making big moves -- though PLUG and FCEL are heading in opposite directions today. While call buyers were bracing for PLUG's big pop, it looks like short sellers successfully predicted FCEL's post-report plunge.
PLUG reported fourth-quarter earnings in line with estimates, while revenue came in above analyst predictions. The stock is up 11.6% to $2.12 as a result, and a recent batch of call buyers may be cheering the rally.
Specifically, it looks like there was some buy-to-open activity Wednesday on PLUG's 2-strike calls -- both the weekly 3/11 and monthly March expiration, which means these traders were targeting a move above $2.00 by the end of this week or next. The volume-weighted average price (VWAP) on the weekly 3/11 2-strike call has jumped from $0.06 yesterday to $0.14 at last check, while VWAP on the March 2 call is up to $0.16 from Wednesday's $0.10 -- which means pre-earnings PLUG call buyers are already sitting on paper profits.
Technically speaking, PLUG has been trending lower beneath its 200-day moving average since late 2014, so it's little surprise that quite a few traders have been betting against the security. More than 19% of the stock's available float is currently sold short, representing 27 times Plug Power Inc's (NASDAQ:PLUG) average daily volume. It's likely some of the weaker bearish hands are hitting the exits today, given the stock's big breakout -- though PLUG remains pinned just below its 200-day moving average, currently docked at $2.15.
FCEL, meanwhile, is down 11.8% at $6.24 after reporting a wider-than-expected loss for its fiscal first quarter, paring its year-to-date lead to 20.5%. The shares could suffer if analysts reevaluate their current bullish positions -- all three brokerage firms following the stock maintain "strong buy" ratings, and the average 12-month price target of $16.67 is in territory not seen since March 2015.
FCEL shares have regained some ground since hitting a record low of $4.51 on Jan. 20, but remain pinned below their 120-day moving average -- which has highlighted the stock's slide since September 2014. In light of this long-term underperformance, over 14% of FCEL's float is sold short. Today, however, FuelCell Energy Inc's (NASDAQ:FCEL) big drop has landed it on the short-sale restricted list.
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