Polar Power Inc [NASDAQ:POLA] shot up yesterday to close the day with gains of 58%. This saw the stock reverse losses incurred over the later part of October. Volumes were quite high too, an indicator that bulls are in control and a bullish reversal could be coming up.
There are several fundamental factors that could see this stock gain upside momentum in the near-term. One of them is that the company is sufficiently capitalized to actualize its goals. A while back, the company did a private placement for $2.8 million.
It achieved this by selling 1,250,000 units of common stock at $2.25 to institutional investors.
The company stated that it would use the money for working capital purposes. With its working capital in order, the company has the flexibility to keep working on product development and customer acquisition in the short-term, and the same could reflect in its earnings in the short-term, and by extension, its stock price. The anticipation of more gains near-term could also add to its upside momentum in the short-term.
The company is also supported by the fact that it operates in a high growth market. The world is coming to terms with the effects of climate change and taking steps to mitigate the same. One way that the world is combating climate change is by enabling investments in renewable energy.
For instance, the State of California recently announced that it would ban all emitting vehicles by the year 2035. The market is also responding positively to renewables as seen in the uptake of electric cars, with companies like Tesla experiencing an exponential growth in value.
Polar Power Inc is right in the middle of the renewable energy boom and is well positioned to benefit immensely. Earlier in the year, the company announced that it had achieved a key milestone in solar hybrid systems, and DC generators that target telecom, commercial offices and residential homes.
The company stated that the move was part of its strategy to create low emission and efficient solar hybrid systems. As the world turns more towards renewables, these and many other of the company’s products stand to keep gaining in value in the near-term.
With all these factors jn its favor, traders will be watching for its price action around the $4.5 to $5 resistance level. If it beats this price level, the stock could test new highs short-term.
About Polar Power Inc
Polar Power Inc designs, makes and distributes DC power generators and other renewable energy systems. It is based on Gardena, California.