Plug Power Leads Five Alt-Energy Plays Near Buy Points

 Plug Power Leads Five Alt-Energy Plays Near Buy Points

New-energy and electric-vehicle companies are among the five stocks to watch this week. Hydrogen fuel cell maker Plug Power (PLUG) is in buy range, while China-based EV makers Xpeng Motors (XPEV) and Li Auto (LI) are near buy points. Lithium plays round out the group, with Albemarle (ALB) and Livent Technologies (LTHM) in buy zones.




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Plug Stock

Plug Power, a leading maker of hydrogen fuel cells used mainly in forklifts in large warehouses, recently announced ambitious plans and new partnerships to expand its business.

Plug Power clients include retail giants Amazon (AMZN), Walmart (WMT) and Nike (NKE).

At an investor day event on Oct. 14, Plug Power said it expects sales of $825 million to $850 million for 2022, 65% higher than 2021 and above FactSet estimates of $759.7 million. Plug Power is not profitable but losses have been shrinking.

On Oct. 27, it said it was teaming up with Lhyfe, a pioneer producer and supplier of renewable and ecological hydrogen, to develop green energy generation plants throughout Europe.

And on Oct. 13, it announced plans to join aircraft maker Airbus to look into the feasibility of a hydrogen-powered airplane.

Plug stock rose 3.1% on Friday to 38.27, after popping 9.3% the day before, climbing back above its 200-day line, according to MarketSmith.

Thursday’s surge could be seen as a breakout from a bottoming base starting in late June, using a 36.14 buy point. Investors could have jumped in as Plug stock crossed last week’s high of 35.50, signaling this move above the 200-day line might hold.

Plug Power is slightly extended now, with the buy range ending at 37.95. After a 17% spike for the week and 50% for October, it wouldn’t be surprising to see Plug stock settle down.

Plug Power’s relative strength line is trending up on positive news about partnerships. Its RS Rating is 86 out of a possible 99. Its EPS Rating is just 7. With a Composite Rating of 55, Plug is ranked No. 16 in IBD’s alternative energy industry group.

Xpeng Stock

Xpeng stock rose 8.1% to 46.63 last week, pulling back slightly after surging on Oct. 25. XPEV stock is just below a 48.08 buy point from a choppy cup base.

Investors could have bought Xpeng stock as it broke a trend line and rebounded from its 50-day line in mid-October.

Xpeng will likely report October sales on Monday. Its Q3 deliveries reached 25,666 vehicles, up 199% despite industrywide chip shortages and other supply-chain issues. 

The startup is stepping up its efforts to catch up to industry leader Tesla (TSLA), in one of the world’s largest EV markets. Xpeng unveiled a flying car last week. It also revealed plans for superchargers ahead of launching a new EV.

Xpeng makes three vehicles: the Xpeng G3i SUV, Xpeng P7 sedan and the Xpeng P5 sedan. After its launch in early 2020, its P7 sports sedan quickly reached a total of 20,000 deliveries and surpassed the G3 compact SUV as its most popular vehicle. This was a major milestone for Xpeng, as it became the fastest vehicle to reach 20,000 deliveries of any Chinese EV startup.

Meanwhile, Xpeng sells the G3i SUV and now the P7 sedan in Norway.

XPEV stock has been on a wild ride since its IPO in 2020. Shares are making their way back up but are still way off their all-time high of 74.49 on Nov. 24, 2020.

XPEV stock has an RS Rating of 91. Its relative strength line was trending upward the last several weeks.

Li Auto Stock

Li Auto stock fell 2.3% to 32.63, paring its weekly gain to just over 1%. LI stock is setting up a handle. The stock is in a consolidation, with a 36.76 entry. If a handle forms, LI stock would have a 34.93 buy point.

The China-based EV maker is also likely to report October sales data on Monday. Q3 deliveries totaled 25,116, up 190% and beating Li’s guidance for 24,500.

Li Auto is among a group of startups vying to gain market share in the booming Chinese EV market, where growing demand is testing the limits of supply-chain issues. The company debuted its first and only model, an electric hybrid SUV called the Li ONE, in December 2019. It costs $29,000 to $76,000 and is one of China’s top selling cars.

LI stock has an RS Rating of 86. Its relative strength line is trending up, after slumping earlier this month.


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Albemarle Stock

Lithium miner Albemarle is in buy range, as lithium prices soar amid rising demand for batteries to power electric vehicles. The metal is a key component in EV batteries.

ALB stock broke out Thursday from a cup-with-handle base, with a 244.46 buy point. Its relative strength line is at all-time highs. ALB stock jumped 8.2% last week to 250.47, setting a closing high on Friday.

More investors are zeroing in on lithium stocks and exchange traded funds, as the push to adopt EVs intensifies.

Keep in mind that Albemarle earnings are due on Wednesday.

Albemarle is also a top holding of Global X Lithium & Battery Tech ETF (LIT), which broke out a past a flat base buy point last week. The ETF also holds multiple Chinese battery makers, as well as Tesla, and Chinese carmaker BYD (BYDDF).

LIT and TSLA are Leaderboard stocks.

Livent Stock

Another lithium miner, Livent, is also in a buy zone, ahead of earnings next week. LTHM stock shot up 12% to 28.22 last week, clearing a consolidation buy point of 27.37. The chase zone extends to 28.74.

Over the past 12 months, Livent stock has soared nearly 130%. It has an RS Rating of 95. Its relative strength line is trending up and right around all-time highs.

Livent reports third-quarter results on Nov. 4. Analysts expect Livent earnings per share of 4 cents, reversing from a loss of 5 cents in the year-ago quarter. Sales are seen gaining 32% to $96.1 million.

Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.

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