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Is Plug Power Heading for New 2021 Lows?

Plug Power is getting hit hard after saying it needs to restate some financial statements. Let's look at the damage on the chart.

Plug Power  (PLUG)  was getting slugged on Wednesday after the company issued a red flag for many investors.

The company said it will need to restate its financial results going back to 2018.

The announcement sent shares reeling, down about 14% so far in the session. That follows Tuesday’s session, where shares lost 8.1% on the day.

The prior day’s weakness may be attributed to the decline in FuelCell Energy  (FCEL) , which reported disappointing earnings.

In any regard, the analysts are split on Plug Power following the news. While some have downgraded the stock, others view the selloff as an opportunity.

Still, once an “accounting issue” is raised it buyers are turned off. Many don’t want to touch it until those issues have been cleared up.

With the stock declining on the news, we have to question whether more lows are on the way.

Trading Plug Power

Daily chart of Plug Power stock.

Daily chart of Plug Power stock.

The daily chart above shows just how painful of a ride it has been in Plug Power stock lately.

$70 was stiff resistance through the first six weeks of the year and shares have been crushed from those levels since.

Once uptrend support gave way to the sellers, the stock has been cascading lower since. Key moving averages - like the 50-day - initially acted as support, but quickly failed before turning to resistance.

We saw similar price action with the 100-day moving average, which acted as support in late February and gave way to a nice rally.

However, with Wednesday’s painful gap below this level, sellers stepped in and sold Plug Power stock before it could even attempt to reclaim the 100-day.

So what now? For many, this stock is now a no-touch and that takes away a number of buyers.

Surprisingly, shares are holding the February low at $33.26. If it fails to do, so it puts the $24 level in play, along with the 200-day moving average. That would be a reasonable washout level should the sellers keep the pressure on.

On the upside, this stock needs to reclaim the 100-day moving average. Above it will put a potential gap-fill in play toward $42.

Right now though, the stock hasn’t earned the benefit of the doubt given its accounting issues. A close below $33.25 and Plug Power stock could be headed lower.