As many of you already know I always try to gauge a stock’s ‘story stock potential’. In order to gauge that potential I consider a lot of metrics. A few that come to mind are the stock’s market cap, the overall sector, disruptive technology potential, is the solution addressing a pressing need or problem and last but not least do the technicals display signs of a catalyst like abnormal volume or abnormal price behaviour.
- Disruptive technology: ‘Power to gas’ qualifies for that
- Market cap: Low market cap allows for a lot of price appreciation potential
- Pressing need or problem: ‘Power to gas’ converts, stores and transports surplus energy from renewable energy sources
- Technicals: Abnormal bullish volume and a bullish long-term inverse head and shoulders pattern
- Sector: Everything renewable energy related is attracting money: Solar, smart grid and energy conversion and storage
As you can see on the chart the technicals allow for a significant price move to the upside. If the stock is able to move through the most recent intermediate high around 13.60 and if volume kicks in the stock should be on its way to complete the bullish inverted head and shoulders pattern. The 15.50 and 16.80 price levels will most likely trigger additional stop buy orders. Earnings are now out of the way and the weekly MA 30 is offering strong support. The way I see it the stock could really move as soon as volume comes in. I have a position. The stock shouldn’t trade below its MA 50 so a stop loss could be placed around 11.60.
Click on the chart to maximize:
Company description Hydrogenics website:
Hydrogenics has over 60 years of experience designing, manufacturing, building and installing industrial and commercial Hydrogen Systems around the globe. We offer world leading expertise for a range of applications, including: Hydrogen generators for Industrial processes and Fueling stations. Hydrogen fuel cells for electric vehicles, such as urban transit buses, commercial fleets, utility vehicles and electric lift trucks. Fuel cell installations for freestanding electrical power plants and UPS systems (uninterruptible power supply). Hydrogenics is pioneering “Power-to-Gas” the world’s most innovative way to store and transport energy. Hydrogenics Corporate headquarters are located in Mississauga, Canada with manufacturing facilities located in Germany and Belgium. We have other corporate and sales offices, and hydrogen installations, operating in several countries around the world. Hydrogenics Corporation is a publicly listed company on the NASDAQ (stock symbol HYGS) and the TSX (stock symbol HYG).
Power-to-Gas technology explained Hygrogenics website:
Power-to-Gas: Bridging the Power Grid and Natural Gas System
Hydrogenics is pioneering Power-to-Gas—an innovative energy conversion and storage solution using electrolysis. It integrates renewable sources of generation, converts surplus electricity to produce hydrogen or renewable gas, and leverages the attributes of the existing natural gas infrastructure. Power-to-Gas is a highly effective way of integrating renewables. It can provide a rapid, dynamic response to the Independent Grid Operator’s signal to adjust to the variations in renewable generation output. The siting of a Power-to-Gas facility is not restricted to any geologic formation as it can be deployed wherever the power and gas grids intersect. It is a scalable technology. Power-to-Gas provides the unparalleled energy storage capacity in the TWh range—seasonal storage capability. It can charge energy several days, or even consecutive weeks, without needing to discharge the stored energy. Unlike other energy storage technologies, Power-to-Gas provides the means to both store and transport energy. By storing hydrogen or substitute natural gas in the existing natural gas pipeline network and associated underground storage facilities, the stored energy can be discharged where and when it is needed most. This results in a higher overall integrated system efficiency. Hydrogenics is working with leading utilities worldwide in demonstration projects today and setting the stage for commercial-scale projects.
You need a certain amount of intelligence, but it’s wasted over a certain level. After that it’s more about intuition. – Stanley Druckenmiller