Under $5 Stock Could Stage a Double-Digit Rally in Next 90 Days

I had the chance to drive a Tesla (NASDAQ: TSLA) Model S electric sports car. I expected to experience an overhyped laggard type of vehicle when compared to a traditional gasoline-powered sports car. Man, was I pleasantly surprised with its performance! 

The pickup when you push the accelerator pedal is nothing short of phenomenal. There is no lag whatsoever, and the car just takes off without the typical pause between gearshifts. This experience got me excited about the future of alternative energy vehicles and the investment potential in this sector. 

My research led me to a very interesting company that is just starting to regain traction after hitting a low of $0.12 at the start of 2013. The stock has soared 3,692% from this low to the current $4.55 in just the past 12 months, and it shows no signs of slowing down. 

The company is Plug Power (NASDAQ: PLUG). It specializes in the design, development and manufacturing of fuel cell systems for the industrial off-road market worldwide.

Its specific niche in this market is the forklift and material handling sector. Most investors are not aware of the fact that this niche represents a $20 billion global market. Plug has been in business since 1997, and it has revolutionized this niche with its GenDrive fuel cell for electric lift trucks. 

The company boasts a market cap of just under $470 million and nearly $25 million in annual revenue. However, it’s important to note that Plug only lists $10.96 million in cash against a total debt of just over $4 million. 

The company could post a profit this year for the first time since its launch due to winning an award from the U.S. Energy Department to develop hydrogen fuel cell range extenders for FedEx (NYSE: FDX) Express delivery trucks. These range extenders are expected to double the 80-mile-per-charge range of the current lithium-ion batteries.

This news sent shares soaring over the past week, above their 200-week simple moving average. Buying on a break above $5, which is the level many institutions use as a minimum share price to consider a company, makes short-term trading sense.

Entering on a daily breakout close above $5 with stops at $4.50 and a 90-day target of $6.25 is my plan for PLUG.

Recommended Trade Setup:

– Buy PLUG on a daily close above $5
– Set stop-loss at $4.50
– Set initial price target at $6.25 for a potential 25% gain in three months

This article was originally published by ProfitableTrading under the title: Under $5 Stock Could Stage a Double-Digit Rally in Next 90 Days

This article originally appeared on InvestingAnswers
Author: David Goodboy
ProfitableTrading

Under $5 Stock Could Stage a Double-Digit Rally in Next 90 Days