Another Look at $PLUG., With Fresh Eyes

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Somebody is still shorting Plug Power into this, and the FINRA data doesn't care about anyone's opinion. It counts.

$PLUG sits at $1.25, $0.34 below its 20-day high of $1.59 and $0.03 above its 20-day low of $1.22.

My read: neutral, waiting on confirmation. I want confirmation before I call a direction.

Pressing into strength

Against its own 60-session range, $PLUG is 46.6% below the high of $2.34 (Aug 21) and 2.8% above the low of $1.22 (Nov 12).

$PLUG closed higher in 4 of its last 9 sessions. Volume over the last five sessions was in line with the twenty sessions before them (1.0x).

The largest one-day move in the past twenty sessions was -9.0% on Nov 10. 59% of PLUG's off-exchange volume printed as short sales (FINRA daily short volume), against a normal 61%.

Days to cover: 6.2. Every short in the name needs 6.2 full days of normal volume to get out.

What I make of it: a crowded short matters only if the stock stops falling, and then covering becomes buying. Whether that starts here is the whole question.

What the market looks to be pricing in

Order-flow analysis classifies the activity as markdown, sellers in control, strength 78 of 100. Markdown: the positioned side is hitting bids and price is moving with the flow. Bounces into the map levels above are where they add. Off-exchange trading: NORMAL: $217K block at $1.23, under half yesterday's biggest, high off-exchange share. Biggest single off-exchange print: 176,275 shares at $1.23, about $217K, on a downtick (seller hit). A print that size is one order being crossed away from the public book, not a crowd of small trades.

In options, dealers short gamma, call wall $2.00, put wall $1.00, gamma flip near $0.0000, hedge pressure 0% of an average day's volume. Days to cover 6.2, 281.0M shares short, short interest -3.8% since the last report.

Squeeze risk 9 of 100; shorts pressing 80 of 100.

Across the broader market, the read is Neutral (bias -18).

What I make of it: the pieces mostly point the same way as the price, which is more than I can say for most setups. None of them is proof.

The bull case

• Short squeeze setup with a measured path to $1.59

The bear case

• Order-flow read: markdown, sellers in control, strength 78 of 100
• Backdrop: Neutral (bias -18)
• Borrow cost decides who exits first

The part nobody is talking about

What I think traders are overlooking is the volume. Price can drift to a level on almost nothing, and what it does there needs real participation. Without it, a break is easy to fade.

The price alone doesn't show it.

If I'm right, and what proves me wrong

If $PLUG posts a close above the recent high on rising volume and volume expands, I think $1.59 becomes the next serious test. Under $1.12, I'm wrong.

The honest objection is that short volume is not a short position. A high ratio is routine in liquid names, and sometimes the shorts are simply right.

That's the whole trade: a level to clear, a line that proves me wrong, and not much in between.

Kill switch

Any one of these and the thesis is over, no averaging down, no renaming it.

• A close through $1.12.
• Selling absorbs the buying at a key level and price loses it on volume.
• Order flow reverses: the sweeps and blocks turn to the other side.
• A scheduled event changes the picture before the trigger is reached.

What I'm watching

No edge yet, and I'd rather say so than invent one. The confirmation is the trade.

Desk record. 35 of 221 scenario targets traded before their invalidation (16%), 125 stopped out, 61 ran out of time, average outcome -0.79% per piece. Past pieces say nothing about this one.

The desk's scenario leans bullish. Bull or bear, the kill switch above is what keeps either view honest.

Sources and further reading: SEC EDGAR filings for PLUG · FINRA daily short sale volume files · Nasdaq short interest: PLUG · Cboe options quotes: PLUG · Plug Power Inc. investor site · PLUG quote, chart and data on StockMarketLoop.

Data as of Nov 12, 9:50 AM ET: options positioning, FINRA short volume, the off-exchange trade record, the structure map, SEC filings and the ticker's headlines. Vaughn McNair (Grandmaster-Obi) and Making Easy Money may hold or trade positions in the names discussed. This is speculation and education, not financial advice.