ITM POWER stock: ITM Breaks a Major Resistance, What is Next?

• ITM Power stock price prediction:  The ITM share price has seen a bullish breakout after coming over a major resistance.
• The stock is falling since 2021, what is the reason?
• The price is looking to take support from the 50 EMA. What are the support and resistance levels?

About ITM POWER PLC

ITM Power was founded in 2001. It is a listed company on London Stock Exchange. The firm can be classified into the renewable energy sector, as it manufactures and designs systems of hydrogen energy for clean fuel production and energy storage. The company markets electrolysis equipment and hydrogen storage solutions and it is especially known for producing green hydrogen from the common tap water. ITM Power caters to North America, Europe, Asia, and Australia.

The company is headquartered in Sheffield, United Kingdom and the CEO in the current times for ITM power is Dennis Schulz. He is leading a total employee size of 400+ employees as of 2022.

Key Financial Highlights as Per the Interim Report Released on January 2023

• The ITM stock has posted a revenue of $2.19 in its interim report.
• The company is operating at a loss and has posted an “Adjusted” earnings before interest taxes depreciation and amortization (EBITDA) of $59 Million.
• Net cash as recorded in the half-yearly report 2022 was $347.71 Million.
  

Some TTM Insights and Ratios 

• The revenue of trailing twelve months (TTM) is reported to be $35 Million.
• Revenue per share as of now is $0.01 (approximation).
• ITM Power is at a gross loss of -$31 Million as of the trailing twelve months.
• The net profit for the trailing twelve months is -$87.8.
• The operating cash flow of the trailing twelve months is -$70.17 Million.

The Metrics have been calculated by financial statements, provided by ITM Power and Yahoo Finance.

Why is the ITM Share Price Falling?

ITM’s share price started rising in 2018 when there were a lot of hydrogen and green power talks. In between, ITM signed a lot of deals. However, the correlation between the deals signed and the revenue that occurred wasn’t the hottest topic the investors were talking about. The revenue growth was not consistent, with some ‘adjusted’ pre-tax losses and immense cash burn. Along with that, the ITM stock has a price-to-sales ratio (P/S) of over 125, which shows its over-the-top valuation. With all these branches combined, it is

no wonder how the market has reacted over the years.

GLEN Stock Previous Price Action and Forecasting

GLEN‘s Previous Price Action

During the end of October 2022, a support of $66 was created upon which the stock tested its sustainability, during March 2023, May 2023, and July 2023. All this time, the bears have faced quite a strong rejection from the bulls.

Although the price did try to bounce back up in February 2023,  it only ended up in vain as the bears sitting there pushed the ITM share price back to the bottom of the support.

Currently, the price has seen breaking the resistance made in June and May. The ITM share price is seen trading between some supports and resistances, while the indicators are also giving some insights for the near future.

Support: The current support level of $85.9 is made after the ITM share price broke the resistance. The bulls are seen to finally come over the price rejections. 

The 2nd support is being created just below the immediate support, as $79.1. There is also a third support of $65 which is a major support. It has been tested with volumes 3 times in the past. 

Resistances: The immediate resistance is being made at the level of $98.3. Following that, the 2nd resistance is being made at the price value of $115.8.

Indicators

MACD: The MACD chart as a whole is above in the bullish segment as a result of the current uptrend, The signal line went below the MACD line in July 2023 giving the bullish signal before the price spike. Right now, the MACD has crossed the signal line and is indicating a short-term bearish momentum.

RSI: The relative strength index (RSI) is looking bearish at the level of 59. After going over 70 points recently, it is coming down to its midzone. It will be interesting to see the movement of RSI after reaching the level of 50.

EMAs: The 50 EMA is currently seen in an uptrend with all the pressure from the bulls. It is closing at the level of $82.4 which is very near the current ITM share price.

The 200 EMA is closing down from the up after a long downtrend and a huge gap from the current market price. It is now at the price value of $104.1

Is ITM Power a Good Investment?

After seeing the reason for the fall of ITM share price, its financial highlights, and its technical insights, the question is- should you invest in ITM? One will take a look at the two possible perspectives.

Investor perspective: Since the financials of the company are not getting any better, with gross term losses, little to no sales per share, and a lack of net cash flow, it would be better to stay away from ITM power until a good quarterly or annual report is published from the board.

The trader’s or short-term investors’ perspective: The ITM share price has seen a continuous downfall but currently a hope for the bulls was seen when the price broke the resistance. Right now, some correction has been seen in the price and it is looking to go towards the support level of $85.9. The 50 EMA is also closing up to that level. So if a bounce back is seen, then the price has to cross and sustain the supply zone of $98.3. The support level of $65 can be considered as a major support which is unlikely to be broken with few corrections.

Conclusion

ITM Power founded in 2001 is a listed company on the London Stock Exchange that deals in the manufacturing process and production of electrolysis equipment and hydrogen storage solutions. The company has reported a revenue of $2.19 Million in its interim report and is currently loss-making in the unit economics. The price has seen some ups and downs in recent times. As per the current situation, investors are advised to avoid buying, and traders are advised to buy or sell after certain support and resistance levels.

Technicals

Support: $85.96, $79.06, $65.92

Resistance: $98.34, $115.80

RSI: 59

50 EMA: $82.42

200 EMA: $104.05

Disclaimer

The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.