The Ceres Power Holdings plc (LON: CWR) share price plunged 14.3% after announcing the signing of its Chinese joint venture (JV) deals with Weichai Power, and Robert Bosch GmbH had been delayed to next year.
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Investors reacted negatively to the news, given that they expected the JV deals to be completed this year so that the company could pursue a listing on the premium segment of the London Stock Exchange.
The renewable energy company reassured investors that the three companies remained committed to the joint venture, whose main structure has been agreed upon except for a few commercial aspects, which are still being negotiated.
Therefore, the firms had to postpone the signing deadline into next year to allow the negotiations on the final bits to continue; hence, the extension of the deal signing to next year. Investors were unhappy with the news, which explains Ceres Power’s share price drop.
Ceres Power shares fell and touched the long-term support level at 308.40p, which we had drawn a few months ago. The move demonstrates the power of crucial support and resistance zones in the share price dynamics of companies despite the price action being driven by fundamental factors such as today’s deadline extension.
Ceres Power shares have fallen 66.81% for the year but seem to have bottomed in October, as evidenced by the sideways trading pattern shown in the chart below. Today’s decline confirmed the strength of the support level created in October as the shares bottomed and traded sideways.
The support level offers an excellent buying opportunity for traders interested in owning Ceres Power shares. However, as always, every investment carries risk, and there is no guarantee that the price will not break below this crucial support level.
*This is not investment advice.
Ceres Power share price.
The Ceres Power share price plunged 14.31% to trade at 311.65p, falling from Wednesday’s closing price of 363.70p.