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FuelCell Energy Inc entered into a months-long downtrend after reaching a Feb. 10 all-time high of $29.44. Although the stock seems to have found a bottom near the $5.77 mark,FuelCell has, so far, failed to garner enough power to make a meaningful reversal to the upside.

The tides in the alternative batterysectormay be beginning to turn. On Tuesday Plug Power, Inc broke up from a resistance zone near the $30 mark that had been holding it down since July 7. As money rotates through the sector, could FuelCell be next to receive headwinds?

The FuelCell Chart:Like Plug Power, FuelCell lost support at the $8.31 level on July 7 and has been unable to trade back above the level. On Aug. 10 the stock attempted to regain the level as support, but sellers came in and FuelCell rejected and wicked from the area.

On Oct. 6 both FuelCell and Plug Power reversed course and entered into uptrends on the daily chart. FuelCell was able to power up over 26% between the date and Thursday before trading lower in consolidation.

Technical traders may have seen lower prices in the cards for Thursday because on Wednesday FuelCell printed a bearish hanging man candlestick. The lower prices may not deter bullish traders, however, because the stock was in need of a daily higher low after soaring higher so quickly.

FuelCell is trading above the eight-day and 21-day exponential moving averages (EMAs), and on Oct. 11 eight-day EMA crossed above the 21-day, both of which are bullish indicators. FuelCell will need to do a lot of work to turn overall sentiment bullish, however, because the 200-day simple moving average is trending about 60% above the stock.

• Bulls want to see FuelCell print the higher low and then for big bullish volume come in and drive the stock up above Wednesday’s high of day, which would further confirm the uptrend is intact. The stock has resistance above at $7.17 and $8.31.
• Bears want to see big bearish volume drop FuelCell back down below the EMAs and toward a support level at $5.77. Below the level, the stock has further support at $4.52 and $3.36.