Last year, there were a number of interesting special purpose acquisition company (SPAC) stocks to choose from. Some of them were in the electric vehicle market, including Hyliion (NYSE:HYLN), which went public in June after a merger with Tortoise Acquisition. And with that, it was off to the races for HYLN stock.
The run-up in HYLN stock didn’t last very long, however. Folks who chased the stock after its massive price surge were punished quickly.
All of that took place prior to the recent change in the U.S. presidential administration and Congress. Today, we have what might be the makings of a perfect storm for higher prices in HYLN stock.
And with the share price looking quite reasonable, it might be an opportune time to enhance one’s clean-energy portfolio with a few shares of HYLN stock. So, let’s delve into the specifics of the share price’s history.
HYLN Stock at a Glance
There’s a well-known pattern that technical traders love to talk about, but you don’t see it very often. It’s called a head and shoulders. You might be surprised to discover how predictive this pattern can be sometimes.
In the case of HYLN stock, it stayed near the $10 level for a while prior to June’s price explosion. It’s not unusual to see post-deal announcement SPAC stocks go vertical after sitting at $10 for a while.
The HYLN stock price tripled quickly in June, going to $31 within a matter of weeks. That’s the left shoulder of the pattern, and the stock dipped in July.
Next came the head, with HYLN stock spiking to a 52-week high of $58.66. That wasn’t the time to get in, as the price chasers soon suffered losses with HYLN falling back below $19.
Finally, there was the right shoulder of the pattern as HYLN stock pushed up to $27, only to fall back below $18. The pattern is now complete, and a new and hopefully bullish price cycle could be imminent.
Government Support
Some folks have called it the green wave, while others have dubbed it the blue wave. Call it what you will, but there’s a distinct possibility that the government will push hard for clean energy initiatives in the coming months and years.
Indeed, there’s evidence that the alternative fuel movement has hit the ground running. This is terrific news for Hyliion, which provides electrified powertrain solutions for Class 8 commercial vehicles.
In other words, Hyliion’s primary business is to electrify big-rig trucks. The company’s flagship product, the Hypertruck ERX, leverages renewable natural gas to help the trucking industry work towards net carbon negative emissions.
Therefore, it makes perfect sense that the team at Hyliion would celebrate the U.S. government’s extension of the Alternative Fuels Tax Credit through 2021.
More Effective Fuel Source
The Alternative Fuels Tax Credit extends the 50-cents-per-gallon fuel credit for the use of natural gas as a transportation fuel.
Furthermore, the legislation includes an Alternative Fuel Vehicle Refueling Property Credit. This extends a 30%/$30,000 investment tax credit for alternative vehicle refueling property.
Hyliion founder and CEO Thomas Healy explains the positive implications for his business:
Our customers have experienced the first-hand benefits of RNG [renewable natural gas] as a cleaner and more effective fuel source… The extension of this credit will encourage fleet adoption, contribute to the growing clean technology sector and support our journey toward a greener future.
And when Healy says that the clean technology sector is growing, he’s not exaggerating. According to the company, Hyliion’s total addressable market is close to $800 billion.
The Takeaway
With such a huge market opportunity, Hyliion could capture strong revenues even without the government’s help.
But the legislative support for cleaner fuel sources certainly isn’t a bad thing for Hyliion’s stakeholders, so prepare for more action from the government and, potentially, higher prices in HYLN stock.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
