Shares of Powerhouse Energy Group PLC (LON: PHE) were up 4.47% today but have been trading near the support zone highlighted in a previous article for seven days now without a major break below it to signal that a downtrend is about to begin.
The shares have gyrated around the zone, occasionally breaking below it before reversing course and rising above it later. However, we are not clear yet as the stock has not made a strong move off the level. Hence, there’s still a risk that a downtrend could begin.
Powerhouse Energy recently issued 6 million new shares at a discount to current prices, yet this did not trigger a strong downtrend, indicating that the bulls defended the support zone.
Bullish traders may find that now a great opportunity to buy the company’s shares, given that they are trading at the bottom of the range we highlighted in the past. The shares could rally to the nearest resistance level at 9.48p, which represents a significant percentage gain.
However, a definitive break below the current support level is likely to trigger a new downtrend invalidating the above analysis.
Powerhouse energy has not made any major announcements in the past few months despite its shares rallying higher to form a parabolic shape at the end of last year. The company, which makes hydrogen energy from plastic waste, has ridden on the coattails of the surge in investor interest in clean energy stocks that has lifted the entire sector.
A positive announcement from the company could trigger a major rally. Otherwise, the firm’s shares are likely to keep trading sideways until such an event.
A negative report could trigger a downtrend; hence, investors should have a stop-loss order to protect their bullish positions if there’s a negative announcement in the future.
Powerhouse Energy share price.
Powerhouse Energy shares were up 4.47% to trade at 7p, rising from Tuesday’s closing price of 6.7p.
Should you invest in Powerhouse Energy shares? Powerhouse Energy shares are traded on the AIM market of the London stock exchange (the alternative investment market) which is the submarket specifically for smaller companies. AIM stocks are attractive to investors as they have tax advantages and smaller companies have the potential to benefit from rapid growth. But are Powerhouse Energy shares the best buy? Our stock market analysts regularly review the market and share their picks for high growth companies
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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