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Small-Cap Quantum Fuel Systems (QTWW) Climbs Despite Market Losses

Two weeks after Quantum Fuel Systems Tech Worldwide (QTWW) saw its shares whipsaw down heavily and then rebound sharply, the company’s stock is up. Quantum closed trading on Tuesday

Two weeks after Quantum Fuel Systems Tech Worldwide (QTWW) saw its shares whipsaw down heavily and then rebound sharply, the company’s stock is up. Quantum closed trading on Tuesday sitting at $4.17 a share, a gain of 8.88 percent. The gains don’t appear to have any news acting as a catalyst, but some strong technical signs could be behind the gains.

Big Day in an Otherwise Tough Month for Quantum

Quantum, which develops and builds advanced clean propulsion systems like the natural gas engines that power many city busses, saw shares drop in the first half-hour after the opening bell along with most of the markets. However, the stock rebounded sharply and carried on gaining for most of the day. It reached an intraday high of $4.42 a share, a gain of almost 15.5 percent.

The stock fell off in the final hour of trading, possibly as momentum traders liquidated their daily position, but ultimately settled at $4.17 a share. Volume for the day was 2.41 million shares, exceeding the daily average of 1.87 million.

The gains, though, are particularly notable for a small-cap on a day when the Nasdaq Comp. Index was off 0.70 percent and the Russell 2000 Index fell 1.48 percent. Quantum, in this case, managed to buck the broader market trend without an apparent catalyst driving gains aside from momentum.

Technicals Could be Driving Gain

Quantum, which has spent the last month in oversold territory with a 14-day RSI consistently below 30.0, saw its MACD line cross its signal line on Tuesday, a classic buy signal. Any traders looking for a chance to jump in on this stock after its heavy drop in early May could easily have seen improving technicals as a signal that the time was right and piled in, helping build momentum that would have attracted other traders.

Institutional Buyers are In on Quantum, Should You Be?

Quantum has quietly been gaining back much of the ground it lost on May 6 when news hit that one of its major customers had arrived at an agreement with one of its major competitors. Since May 7, though, the stock’s up over 35 percent.

And this despite an earnings miss just last week. The company dropped its Q1 2014 report after the closing bell on May 13 and it wasn’t what investors were hoping for. Losses of $0.16 per share were well ahead of the $0.05 a share consensus estimate, and the $7.95 million in revenue was well behind the consensus estimates of $12.65 million.

The predictable hit came on May 14, when shares fell 6.91 percent, but the negative report appears to have been merely a speed bump for the Quantum recovery. Since May 15, the stock is up 19.14 percent, more than outpacing any losses associated with the lack-luster earnings report.

And, while Quantum certainly has its detractors, the stock remains fairly popular among institutional buyers. Over 40 percent of the stock’s float is owned by institutional buyers, and the last three months has seen that level of ownership more-than double. Ultimately, Quantum Fuel may have seen bottom on May 6 and appears to be climbing back, slowly but surely. In which case, this might be a valuable green-energy play to hold if and when the stock markets break out of their current correction phase.

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