Bloom Energy Corporation (NYSE:BE) shares are trading higher on Monday, and some market dynamics could be bullish in the short term. This is why Bloom Energy is the Stock of the Day.
If a stock is in a downtrend, the forces of supply outweigh the forces of demand. There are more shares for sale than there are to be bought.
Investors and traders who wish to sell their shares are forced to undercut each other's prices to attract buyers. This results in the shares going into a downtrend.
These trends end when they reach support levels.
At these levels, there are enough buy orders to absorb all the sell orders. Those who wish to sell are no longer forced to undercut each other, and prices no longer fall.
As you can see on the chart, there has been support for Bloom Energy around the $135 level since January.
Support can stay intact for an extended period of time because of seller's remorse.
Some of the people who sold their shares around the support level regret doing so if the price rallies after. A number of them vow to buy their shares back if they can do so at their selling price.
As a result, when the stock returns to the support level they place buy orders. If there is a large quantity of these orders, it will create support.
Sometimes stocks rally off support levels.
This happens when some of the investors and traders who created the support become anxious and impatient. They are worried that the sellers will go to someone else. So, they raise their bid prices.
Other impatient buyers see this and do the same. This can force the shares into an uptrend, and it may be about to happen to Bloom Energy.
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