This bullish assessment of Plug Power (NASDAQ:PLUG) needs to come with a clear warning: PLUG stock is wildly risky, having tanked nearly 58% on a year-to-date basis and hemorrhaging almost 64% over the past 52 weeks. In other words, I am not suggesting that the hydrogen fuel cell specialist represents a sterling investment because it’s not.
That said, every dog has its day — and in the case of PLUG stock, it could have a good week. But the catch is that the positive vibes may only linger for this week only. Therefore, if you decide to participate in this wager, you may want to consider exiting the position before the closing bell rings out on April 25, 2025.
Looking at the candlestick chart for PLUG stock, it’s difficult not to suffer a bout of depression or perhaps for the cynical schadenfreude. Try as they might, the bulls simply cannot sustain upside momentum. Instead, the bears appear to have almost total control of this market. At the same time, even extreme cycles don’t materialize in perfectly linear fashion.
At some point, as folks say in baseball, PLUG stock is due — in this case, due for at least a temporary pop. We as human beings instinctively recognize this. Remarkable streaks (both positive and negative) never last indefinitely. It’s just that forecasting such events is exceptionally difficult based on traditional analytical methodologies.
Structurally, standard approaches such as technical analysis and even fundamental analysis hinge on a framework called continuous-time signal processing. This is the study and manipulation of signals that are defined at every instant in time, using smooth, uninterrupted functions to analyst how those signals change, evolve and interact.
While continuous models obviously have their uses, they have a limitation when it comes to projecting probabilities. Essentially, the continuous framing assumes that the market flows like a stream — always moving, but never holding form long enough to define anything repeatable. That makes extracting probabilities from it like trying to calculate the odds of a ripple pattern on a pond. Technically possible. Practically meaningless.
To address this limitation, I deployed a discrete-event analysis on PLUG stock, compressing its price action into manageable sequences and applying a first-order modified Markov-chain model. With this framework, I discovered that PLUG stock incurred nine weeks of losses over the past 10 weeks.
Historically, when such a cycle appeared, PLUG stock swung higher in the following week, with a median return of 10.02%.
Before you rush out to buy PLUG stock, it’s important to realize that the median returns in the second and third week are negative, with losses of 4.69% and 6.72%, respectively. And this tracks with the historical performance of PLUG. While it has bouts of positivity, the bulls simply cannot sustain rallies.
Also, because Plug Power is only available as a monthly option, you would have to speculate in the open market. This may require an uncomfortable large exposure to a known risky asset. Nevertheless, if you were gung-ho on betting on PLUG, this week may be the time to do it.
