Is A Correction In The Cards For Clean Energy Fuels Stock?

by Trefis Team
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Clean Energy Fuels stock (NASDAQ: CLNE) has rallied by almost 9% over the last week, outperforming the S&P 500 which is down by about 2% over the same period. While CLNE’s increasing focus on expanding its environmentally friendly renewable natural gas business and its partnership with big oil companies have been a big driver of its stock price gains over the last few quarters, the recent rally is driven partly by increasing interest from Reddit investors, who have been piling into small and mid-cap stocks with relatively high levels of short interest.  So will Clean Energy Fuels stock continue its rally over the coming weeks and months, or is a correction looking more likely?

According to the Trefis Machine Learning Engine, which identifies trends in a company’s historical stock price data, returns for Clean Energy Fuels stock average a little over 4% in the next month (21 trading days) after experiencing a 9% rally over the last 5 trading days. The stock is also likely to outperform the broader markets over the next month, with an expected return that would be 3% higher compared to the S&P 500.

But how would these numbers change if you are interested in holding CLNE stock for a shorter or a longer time period? You can test the answer and many other combinations on the Trefis Machine Learning to test CLNE stock chances of a rise after a fall and vice-versa. You can test the chance of recovery over different time intervals of a quarter, month, or even just one day!

MACHINE LEARNING ENGINE – Try it yourself

IF CLNE stock moved by -5% over 5 trading days, THEN over the next 21 trading days then CLNE stock moves an average of 1.8%, with a 48.9% probability of a positive return over this period.

Also, given a -5% movement for the stock over 5 trading days, it has historically witnessed an excess return of 1% compared to the S&P500 over the next 21 trading days, with a 44.1% percent probability of a positive excess return.

Some Fun Scenarios, FAQs & Making Sense of Clean Energy Fuels Stock Movements:

Question 1: Is the average return for Clean Energy Fuels stock higher after a drop?

Answer:

Consider two situations,

Case 1: Clean Energy Fuels stock drops by -5% or more in a week

Case 2: Clean Energy Fuels stock rises by 5% or more in a week

Is the average return for Clean Energy Fuels stock higher over the subsequent month after Case 1 or Case 2?

CLNE stock fares better after Case 2, with an average return of 1.9% over the next month (21 trading days) under Case 1 (where the stock has just suffered a 5% loss over the previous week), versus, an average return of 3.7% for Case 2.

In comparison, the S&P 500 has an average return of 3.1% over the next 21 trading days under Case 1, and an average return of just 0.5% for Case 2 as detailed in our dashboard that details the average return for the S&P 500 after a fall or rise.

Try the Trefis machine learning engine above to see for yourself how Clean Energy Fuels stock is likely to behave after any specific gain or loss over a period.

Question 2: Does patience pay?

Answer:

If you buy and hold Clean Energy Fuels stock, the expectation is over time the near-term fluctuations will cancel out, and the long-term positive trend will favor you – at least if the company is otherwise strong.

Overall, according to data and Trefis machine learning engine’s calculations, patience absolutely pays for most stocks!

For CLNE stock, the returns over the next N days after a -5% change over the last 5 trading days is detailed in the table below, along with the returns for the S&P500:

Question 3: What about the average return after a rise if you wait for a while?

Answer:

The average return after a rise is understandably lower than after a fall as detailed in the previous question. Interestingly, though, if a stock has gained over the last few days, you would do better to avoid short-term bets for most stocks – although CLNE stock appears to be an exception to this general observation.

CLNE’s returns over the next N days after a 5% change over the last 5 trading days is detailed in the table below, along with the returns for the S&P500:

 

Think oil and gas stocks are too risky given the growing climate action and decarbonization? Investing in Solar and Hydrogen stocks could be a better bet. Check out our theme on Solar Stocks and Hydrogen Economy Stocks for details.

See all Trefis Price Estimates and Download Trefis Data here

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