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Alternative energy stocks, a group that's no stranger to volatile trading activity, were in the spotlight Monday on the heels of last week's gigantic power failure, but the lack of a uniform move indicated that investors still haven't settled on what the future holds for this sector.

Ballard Power



FuelCell Energy



Plug Power


were moving up on expectations that they could soon benefit from stronger demand for alternative energy sources and increased government funding.

Optimists could point to President Bush's statement last week that he wanted to modernize the nation's electric system to avoid a repetition of the outage. But analyst David Smith at Smith Barney Citigroup noted in a report to clients that "these companies do not have commercial product available today."

He said the recent gains have been "macro- and momentum-driven, with no fundamental or company-specific driver that would warrant such a powerful shift."

As a result, Smith cautioned that in the past aggressive moves higher by the alternative-energy names have frequently been followed by sharp declines, after the news flow and volume dry up.

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Indeed, a few stocks that rose Friday, when overall market volume was incredibly thin, were down today, including

Active Power



American Superconductor



Proton Energy

( PRTN).

Smith did say that some of the fuel-cell concerns sport attractive valuations and could be ready to gain should the U.S. government decide to invest in product development in the sector.

Analyst Chris Kwan of TD Newcrest International agreed with that point, writing in a research report that "certain fuel-cell stocks stand to benefit from enhanced spending on backup power and distributed generation." Kwan upgraded Ballard Power to buy from hold and raised his rating on FuelCell to buy from reduce.

Separately, Ballard Power introduced a new hydrogen-fueled stationary backup power generator for the telecom market. Ballard was up 32 cents, or 2.5%, at $13.17, while FuelCell was gaining 50 cents, or 5.3%, to $9.90. Plug Power was adding 23 cents, or 4.5%, to $5.39.

Among the decliners, Active Power was down 15 cents, or 6.5%, at $2.15 after rising 26% Friday. American Superconductor fell $1.15, or 8.7%, to $12.05 after a gain of 42% in the previous session, and Proton Energy lost 22 cents, or 8.8%, to $2.27 following Friday's 23% climb.