Hi Lou: I was wondering if you could take a look at Ballard Power and tell me what might be happening there. Thanks, Bruce
Thanks for the assignment. Ballard Power Systems Inc. was at one time a Canadian stock market darling reaching highs near $165 a share in September, 2000. At the time the sizzle that drove the stock was the research and development of fuel cells for the automotive industry. Unfortunately, that long term concept wasn’t sustainable and the company restructured to focus on near term commercial markets. Ballard now applies its efforts to areas including backup power, distributed generation and material handling equipment.
The stock has had a great run in 2013 rising from a 52-week low of $0.58 on Dec. 24, 2012, to a 52-week high of $2.47 on May 29, 2013. The main driver in the advance has been improved sentiment in the alternative energy space since the beginning of this year. The spark came from U.S. President Barack Obama’s inaugural speech for his second term where he promised to take a leadership role on climate change and support clean energy development.
A study of the charts will identify some of the technical factors in play with Ballard.
The three-year chart paints a picture of a stock that found a bottom in late 2012 and reversed a downtrend that had dominated the agenda since March, 2011. The bounce off the 52-week low in December, 2012, put buyers in control of the market in 2013 and has given rise to a very profitable, but volatile advance. The explosive move up in March was triggered by news of a development deal with Volkswagen. The shares then pulled back to support at $0.80 in April where it caught another burst higher to the 52-week high in May. I would have to say that Ballard demands a strong constitution.
The six-month chart indicates the MACD and the RSI has provided informed investors with buy and signals that they could have used to their advantage. The buy signal in April is worth noting. At this point, the momentum indicators are not suggesting a move higher while buyers take a breather.
Make sure that you understand that Ballard is a speculative stock. Capture your profits when available.
Make it a profitable day and happy capitalism!