J.P. Morgan Bull Note Sparks PLUG Rally

Plug Power stock is eyeing a rebound off its late-February pullback

Deputy Editor
Mar 1, 2021 at 10:54 AM
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Plug Power Inc (NASDAQ:PLUG) is getting a big boost this morning, following a bull note from J.P. Morgan Securities. Specifically, the analyst in question upgraded PLUG to "overweight" from "neutral," calling the stock "attractively priced," with several "long-term growth opportunities." In response, the alternative energy stock is up 6.6% at $51.55 at last check. 

Analysts were optimistic toward PLUG coming into today, with nine of the 12 in coverage calling it a "buy" or better. Plus, the security's 12-month consensus target price of $64.03 is a 22.8% premium to current levels. 

Today's analyst attention has sparked an uptick in bullish options activity. So far, 44,000 calls have crossed the tape -- almost twice the average intraday amount -- compared to just 14,000 puts. The weekly 3/5 54-strike call is getting the most attention, followed by the 60-strike call in the same series, with new positions currently being opened at both.

A look back shows options traders have been unusually bearish, however. While call volume has outnumbered put volume over the past 10 weeks, PLUG's 50-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) its higher than 98% of readings from the past year. 

Short sellers, meanwhile, have been hitting the exits in droves, with short interest down 41.3% in the most recent reporting period. The 36.87 million shares sold short still make up 16% of PLUG's available float, however, which may lead to even more upside, should this pessimism continue to unwind at such a rapid rate. 

This could very well be the case, considering PLUG's potential comeback on the charts. The equity experienced a late-February selloff, which stopped just shy of the $40 level -- a former area of resistance prior to the equity's early January bull gap. The stock's 80-day moving average also emerged as underlying support for this pullback, keeping PLUG at an impressive 1,088.2% year-over-year lead. 

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