Will FuelCell Energy Inc (NASDAQ:FCEL) Buck The Negative Trend?

[[tagnumber 0]][[tagnumber 1]]It is hardly a good time to be an investor in FuelCell Energy Inc (Nasdaq:FCEL), especially during the last twelve months. Is this a temporary negative prospect or one that is in for the long haul?[[tagnumber 2]] [[tagnumber 0]]A quick stock research revealed more positive than negative developments about the company, both in terms of its fundamental and technical layout. For a start, FCEL is in a steady downtrend which stretches beyond the last twelve months. Since July 2014, the stock has lost more than 65 per cent from its market value.[[tagnumber 2]] [[tagnumber 0]]Yesterday, FCEL closed trade at $0.93 per share, shifting a total of 1.5 million shares, or less than half of the daily average volume of the stock. Thus, FCEL remained at a stone‘s throw from its 52–week low of $0.86 and yet further away from the 52–week high of $2.84 per share. Falling revenues and failure to meet earnings expectations have all contributed to this development. Indeed, the company closed the quarter ended Apr. 30, 2015 with:[[tagnumber 2]] [[tagnumber 7]] [[tagnumber 8]]$28.6 million in revenue, down 50% as opposed to the quarter ended Oct. 31, 2014[[tagnumber 9]] [[tagnumber 8]]a net loss of $10 million vs. $16 million in the corresponding quarter in 2014[[tagnumber 9]] [[tagnumber 8]]an increase in inventories worth $15+ million as compared to the quarter ended Oct. 31, 2014[[tagnumber 9]] [[tagnumber 14]] [[tagnumber 0]][[tagnumber 16]]As it seems, it took FCEL six months to a) generate half the revenue it generated in the quarter ended Oct. 31, 2014 and b) stack up inventories by $15 million over the same time period. This leads us to suggest that FuelCell may be having trouble keeping sales strong. In this respect, the fact that the net loss attributable to common shareholders of $0.04 is twice as much as the analysts‘ forecast for the quarter is yet another indication that the company‘s management may not be doing their best right now. In addition, FCEL‘s earnings estimate for 2015 are considerably lower than the industry average.[[tagnumber 2]] [[tagnumber 0]]In spite of the facts mentioned above, FuelCell does seem to have the potential to grow and it is evident in a few analyst recommendations rating the stock as a “Buy“. This seems to have inspired some insider trading as the net insider trading activity amounts to 234 thousand and 1.07 million for the last three and twelve months, respectively. So, on the one hand, corporate directors and employees have confidence in the stock‘s rebound. On the other hand, there are quite a few investors who are shorting the stock. The average short interest in FCEL shares for the last three months stands at 35 million. With an average daily trading volume of some 3 million, it would take shorters an average of 10 days to cover, so the quick closing of a short position could be troublesome. [[tagnumber 19]]Finally, FCEL has a negatively weighted alpha of –57.83, well below the industry average, which correlates to its chart performance for the last twelve months.[[tagnumber 2]] [[tagnumber 0]]At present, the odds may be stacked against a prospective surge of FCEL on the charts. Yet, this does not guarantee that the stock will continue to lose ground forever, either. The company has the technology but it has yet to gain a market share which is big enough to offset losses.[[tagnumber 2]]