Regular readers of this space may have noticed that FuelCell Energy, Inc. (FCEL) popped up on my unusual stock volume scan earlier this month with a loss of 9%. I have been watching the stock since then and noticed some interesting activity. The 30-minute intraday chart below shows the movement since that drop.

Chart Courtesy of Thomson Financial

What stands out is that buyers were willing to jump right back into the stock after the selloff. With that in mind, let's turn our attention to the daily chart.

Chart Courtesy of Thomson Financial

Here we see that the stock is pushing into resistance near 8.50. This area proved to be resistance at the end of last month. However, the rejection there was mild, giving us a higher low relative to early July. Overall, I think that the willingness of buyers to step in as the stock trades below resistance is worth noting.

The other aspect of the recent action that I wanted to point out relates to what I said back in April - "FuelCell Energy (the company) has a great story but for now the stock is just too unstable for me. I think this is still one to watch but I need to see some signs of price stability start to emerge."

While the stock is still extremely volatile, the action since the beginning of July has at least tended to be orderly. A big test for that newly-found stability is looming though. According to this release, FuelCell will report earnings on Wednesday, August 27.

This might be an interesting situation if the company can post better-than-expected numbers. Data collected by our Quantified Analysis group shows that 24% of the stock's float is sold short so there is potential for a short-covering rally.