Simon has over six years of professional trading experience across FX, commodities and equities. He has a strong passion for financial markets and is particularly focused on price action trading
Shares of Ceres Power Holdings plc (LON: CWR) fell 19.9% ignoring an article published in the Telegraph about its unique business model and the bright future for Hydrogen energy that could push Ceres’ stock higher.
Well, when a company’s stock price goes in the opposite direction to what the fundamentals suggests, it is prudent to look at its price chart and technical indicators for clues that could explain its behavior.
The daily chart below shows that Ceres Power shares have fallen from above 1600p to below 1200p over the last two days breaking below the crucial 1500p support level, which is now a resistance level.
The good news is that Ceres Power’s stock price was way over-extended following last year’s rally that saw it rise from 270p up to its current levels, and the recent 25% decline was much needed if the stock is to rally much higher.
We covered Ceres Power stock earlier this month wondering when it would break above the crucial 1500p level, which it finally did late last week before the current downtrend ensued. We also mentioned that the company has benefitted from the electric vehicle (EV) investment trend, which some could argue has now formed a bubble.
Traders who are still bullish on Ceres Power should wait for at least 1-2 green days before establishing new positions to ensure that the buyers are back in control of the price.*
*This is not investment advice.
Ceres Power share price
Ceres Power shares fell 19.94% to trade at 1180p having dropped from Wednesday’s closing price of 1474p.
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