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 Powerhouse Energy Group PLC (LON: PHE) crushed 18.9% falling for the third consecutive day as the parabolic rally that marked the end of 2020 finally ends.
The company, which generates hydrogen energy from waste plastics, saw its share price rally from 3.32p on December 21 to a high of 11.42p on December 30, a 243% gain, before the current downtrend begun on December 31.
The parabolic rally was not fueled by any major developments as the company announced to investors on December 23 with the most likely explanation being that it could have been triggered by end of year capital flows as major funds rebalance their portfolios.
Powerhouse Energy achieved major milestones during the past year including starting the groundworks and infrastructure preparations for the landmark first DMG waste-plastic-to-hydrogen plant, at the Protos hub in north-west England.
The company also redesigned the plant to enable it to export larger volumes of hydrogen than was initially planned and it seems like institutional investors were paying attention given the rally described above.
Powerhouse is an attractive target for investors in the sustainable energy sector given its revolutionary business model of turning plastic energy into hydrogen power. The fact that the firm has started building its first plant is evidence that it has a viable business.
However, parabolic rallies are usually unsustainable and they are usually followed by a major selloff like the one going on at the moment. The stock has so far lost over 35% of its value from its December peak and could fall further.
The latest selloff presents an excellent opportunity for traders who want to open new positions in the stock.*
*This is not investment advice.
Powerhouse Energy share price
Powerhouse Energy shares fell 18.9% to trade at 7.30p having dropped from Monday’s closing price of 9p.
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