BE exhibits strong technical trends and outstanding performance; despite recent moderation, it remains a standout in alternative energy infrastructure with key support levels intact ahead of index inclusion.
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Yes, there is an exceptionally strong and outstanding performance from Bloom here. We can also see that it is a standout company even among alternative energy infrastructure companies here.
But what we have seen recently has been a kind of moderation in price movement. We recorded a peak at 351.28 during the past twelve weeks, and since then we have been trending downwards.
But we broke through the downtrend line in blue. The long-term upward trend line in blue is still in place , but it has been replaced by a sharper white trend line pointing upwards.
So, for now, we have reached a high point around 280 . Friday looked like we might break the downtrend line, but today's pre-market activity has likely pushed us back strongly above that level.
There are previous highs and a gap near 254, another low point here and there at 198 and 194 or 185, and another peak of our pullback is coming at 320.
If we look at the moving averages, Friday's activity looked like we were going to break not only the trend line, but also the 5-day exponential moving average in dark blue which represents one week .
So, it appears that we are seeing a bounce off this short-term moving average here. If we start to slip under it, that could be an early sign of a possible change in direction.
The Relative Strength Index (RSI ) is trending downwards. We can see that the red trend line is still active. But the green trend line is still valid as well. We are above the midline at level 50.
We have this triangular shape that needs to be taken into account here. Therefore, look for a breakout that crosses either of these trend lines to more clearly define the next direction.
Now, studying our volume profile shows us where large trading volumes are concentrated at which price levels. We can see that we are inside a knot, which is those large trading clusters between 265 and 295.
So, once we start to rise above 295, if that happens, we may see faster price movements. This is a relatively light trading zone at these extremely high levels. You can also note that it corresponds to some extent with a portion of this price range from here.
Meanwhile, on the downside, we find that the 207 to around 230 level is where most of our activity is concentrated in these lower phases. Therefore, this may also be a notable area for support.
Finally, I would like to draw attention to the extremely heavy trading volume in Friday's session. People may be making moves ahead of this stock being included in the S&P 500 index, which is a major change in the fundamental expectations for this name.
Of course, as I said, this leads to larger negative flows from institutional investment here. But, to think about a typical deal for this name, looking at November 20th, that's our green box here.
With an increase or decrease of approximately 30%, which is consistent with these old peaks here.
Therefore, in the deal in question, the options were very expensive in this stock. So, one thing you can consider is a butterfly strategy if you are afraid of the large costs you would incur to get a long exposure on the buy side.
Therefore, buying a Butterfly Call Options strategy on November 20th at execution prices of 300, 350, and 400 at a cost of 610. So, our maximum loss is the cost paid of 610 here.
Our maximum profit if the expiry expires exactly at the average execution price of 350 would be 4,390 here. The break-even points are at 306.10 and 393.90, representing increases of approximately 13% and 45% respectively .
Our expected movement is around 30% here. So, this will give us a deal through which we get that long exposure. We will have the opportunity to close it early if we get a positive move, but beware if we start to exceed that much-anticipated move .
We will return once again to a situation where we are at our loss levels here. Therefore, it is a deal that may require some management, but it gives you exposure to upside at a lower cost.
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What this channel has said about $BE
Schwab Network has 3 calls on this stock; only the adjacent ones are shown.