Why Ballard Power Stock Jumped 11% on Monday

Ballard Power (TSX:BLDP)(NASDAQ:BLDP) shares jumped after the stock entered oversold territory, yet still provides growth for long-term investors.

Amy Legate-Wolfe

Author Bio

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband.

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“October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published January 31, 2022 2:30 pm EST

Ballard Power Systems (TSX: BLDP)(NASDAQ: BLDP) shares climbed 11% on Monday, as the tech crash seems to have fueled Ballard stock after analysts weighed in on a potential upside.

What happened?

It looks like the recent increase in Ballard Power stock may come from its entrance into oversold territory recently. The clean energy fuel-cell producer fell to 52-week lows last week, and it started its climb back up, as the tech crash seemed to come to an end.

The recent selloff among clean energy companies like Ballard Power stock created an opportunity that investors don’t want to miss out on. When the stock started to turn around, it traded at about $11 per share. As of writing, it’s now up 19% from those 52-week lows and climbing.

So what?

This could be the catalyst for some positive momentum around Ballard Power stock and other clean energy companies. There has been a massive push in the clean energy sector recently. Countries and companies alike have committed to net-zero emissions by 2050. Electric vehicles have seen a massive increase in popularity. Furthermore, the soaring prices of oil and gas coupled with wildfires, flooding, and other deadly weather don’t help matters.

It’s no wonder that Ballard Power stock has started seeing some positive movement, albeit quite slowly. This is why it’s likely long-term investors are getting in on the action after taking out profits earlier. Now, it’s an opportunity that simply cannot be passed up. The company traded at a relative strength index of 26.29 in oversold territory when the market opened. Yet as of writing, that’s now up to 41.76, which is now back in neutral territory.

Now what?

It looks like there could be a boom after the bust for Ballard Power stock. And while you may worry it could come back down once more, long-term investors shouldn’t fear. There is movement towards clean energy, and Ballard Power is a fantastic play.

The company gets in on every type of transportation except person vehicles. Trains, tanks, even marine equipment will be powered by the company. This is why analysts predict great things for the company. It now has a consensus target price of $27 — a 108% increase from today’s price.

And not only will those returns be strong; they’ll also be stable, with long-term contracts tied to Ballard Power stock among other clean energy companies. So, this is a fantastic time to buy and hold this long-term stock.