TRADE ALERT: raising buy-up-to price on Ceres Power
18th February 2020 |
I have a strong feeling there is something very special going on right now in the hydrogen sector. For much of the last decade every time oil prices declined, it had a significant knock-on negative effect on renewable energy shares. The logic for this correlation was the dependence on high oil prices to justify the high cost of building and maintaining infrastructure and it was just not viable at low energy prices.
The reality today couldn’t be more different for hydrogen. The Brent crude oil price made a new 12-month low over the last few weeks and is barely steady around current levels.
Meanwhile, natural gas prices are back close to the lows posted in 2012 and 2016. Normally that would be a death knell for renewable investments but the rationale today is just different. Hydrogen is rallying because with wildfires sweeping the globe, scientists wearing t-shirts in Antarctica and flight shame becoming a global phenomenon, investors are waking up to the idea that the renewables sector really could be a saviour for humanity.
I am raising my buy-up-to level on Ceres Power to 460p because the recent low in the share is now an important area of potential support and the brief setback offers a fresh entry point. I am aware that the stock price has currently exceeded the buy-up-to price of 460p but I am reluctant to raise it any higher due to market volatility. Given that volatility, I think we’ll see the share dip back down into “buy” territory sooner rather than later.
Many thanks,
Eoin Treacy
Investment Director, Frontier Tech Investor
