Shares of Bloom Energy Corporation (NYSE:BE) are higher on Friday. They are rallying after finding support again around $163. But the move higher may be over. The shares have crashed into a resistance level. This is why Bloom Energy is the Stock of the Day.
As you can see on the chart, the $163 level has been important for Bloom Energy. It was a resistance level in February and March.
When the resistance broke in April, some of the people who sold shares at it came to regret their decision. Some decided that if they could eventually repurchase their shares at the same price they sold them for, they would.
When Bloom Energy fell back to this level in July, they placed buy orders. These orders formed support at the former resistance level.
When the shares rallied afterward, some of the people who sold at the support regretted it. Some decided to buy their shares back if they could eventually get them for the same price they sold them.
As a result, when the shares hit the $163 level yesterday, they entered buy orders. The large quantity of these orders created support at the level again.
Now the stock has hit resistance around $190. This isn’t a coincidence. This level was support, and resistance tends to form at prices that were previously support.
This is a result of buyer’s remorse.
People who bought at support regretted it when it broke and the price dropped. Some held onto their losing positions, but others decided to sell at breakeven if they could.
Now that Bloom Energy has rallied back to $190, they are placing sell orders. At least for now, they have created resistance at the former support.
Good traders can identify important price levels. It gives insight into where trends may turn. This creates opportunities for profit.
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