Nel ASA Shares Face a Pivotal Test as Support Weakens

Nel ASA NO0010081235

Investors are confronting a tense market environment as the outlook for Norwegian hydrogen specialist Nel ASA grows increasingly precarious. The company's shares are under significant pressure, trading dangerously close to a critical psychological threshold and raising concerns about a potential technical breakdown.

The immediate focus for traders is the fierce battle to hold the €0.20 support level, approximately equivalent to 2.30 Norwegian Krone (NOK). A sustained breach below this line is viewed by market technicians as a gateway to uncharted, lower price territory. Any attempt at a rebound is expected to encounter substantial selling pressure in the 2.50 to 3.00 NOK range, where investors trapped in losing positions are likely waiting for an exit opportunity.

Trading action on Thursday underscored the bearish sentiment. On German venues such as Tradegate, the equity declined by approximately 2.27% to €0.198, completely erasing the minor gains seen the previous day on the Oslo exchange. The stock now hovers alarmingly close to its 52-week low of 1.95 NOK. Analysts warn that a decisive break below key chart levels could trigger automated selling algorithms, potentially accelerating the downward momentum.

Fundamental Pressures Mount

The selling pressure is not merely a technical phenomenon but is grounded in a sobering operational reality. The company's recent third-quarter financial report laid bare ongoing challenges, dispelling previous growth narratives for the foreseeable future.

Key figures from the Q3 release highlight the struggle:
* Revenue Decline: Quarterly revenues fell sharply by 17% year-over-year to 303.37 million NOK.
* Persistent Losses: The company reported a continuing loss per share of -0.05 NOK.
* Demand Concerns: The double-digit drop in sales points unequivocally to waning demand or significant project delays.

The market is now pricing in this disappointing performance. In the absence of immediate catalysts for new revenue streams—such as a major contract, which currently appears elusive—the company's valuation is being questioned.

Analyst Sentiment Turns Overwhelmingly Negative

The institutional perspective offers no solace for hopeful shareholders. The analyst consensus paints a bleak picture, with a stark imbalance in recommendations. Currently, seven "sell" ratings stand in direct opposition to zero "buy" recommendations.

The average price target from analysts has been slashed to 2.27 NOK. Given that the share price is already trading around this level, market experts see little room for recovery without a substantial external catalyst. This consensus target underscores the severe correction that has impacted both the company and the broader hydrogen sector, a dramatic shift from earlier, more optimistic valuations.

The prevailing high volume on down days sends a clear message: large investors are utilizing available liquidity to exit positions rather than establish new ones. For now, Nel ASA remains firmly trapped within a dominant downtrend, with all eyes fixed on whether its last key defense level can hold.