UQM, VLNC, FCEL: Time to pull the plug?

After long period of consistent battering, shares of UQM Technologies (AMEX: UQM), Valence Technology (NASDAQ: VLNC) and FuelCell Energy (NASDAQ: FCEL) have started moving up. The big question for green tech and clean tech transportation investors is if the rally is going to stay. There is no simple straight answer to this but the signs of a convincing rally are missing. On the contrary, investors are cautious and the quarterly results are being waited to make sure if the previous write downs were one-time poopers.  

UQM Technologies (AMEX: UQM) is a company with a reasonably strong business model. It is also one of the few companies which are likely to rough out the ‘valley of death’. The stock trades at $2.3, after increasing by 7 per cent in the last month. The couple of months before that was something best characterized by an inverted trajectory of an airplane. Much has happened since the last month when I suggested a bounce back in the stock was imminent. The markets have recovered from their previous lows and after may be after a couple of days, are again likely to move sideways with a negative bias. In this scenario, it looks sensible to pocket the gains one has made so far and wait for a correction instead of holding the stocks only to see them returning to $2 levels.

Trading at $1.22, shares of Valence Technology (NASDAQ: VLNC) have also gained close to 7 per cent in the last month. However, the worrying factor is the lack of participation from retailers. This mild recovery on low volumes can probably continue for some more days but log lasting rally is just not possible without heavy volumes as sellers who bought at the top of the last bull phase will be willing to sell at every jump of 3-4 per cent.

Investors in FuelCell Energy (NASDAQ: FCEL) must be relieved as the stock recovered smartly, gaining 10 per cent since the start of this month after going through a sharp correction in the last week of June. There have been volume surges too albeit sporadic and few and far in between. With the concerns of liquidity and credit tightening looming large on the market, the pressure will most likely percolate down to the level of small caps and mid caps. Better to book profits (if one purchased at lower levels) or partial losses (if one bough at even higher levels) at the current price of $1.44.