Norwegian Hydrogen Specialist Nel ASA Faces Critical Technical Breakdown

Nel ASA NO0010081235

Norwegian hydrogen technology firm Nel ASA is experiencing a significant technical setback in equity markets, with its shares breaching a crucial long-term support level. This development occurs despite the company securing substantial new contracts throughout November, highlighting a growing divergence between operational achievements and market performance.

Market sentiment toward Nel has shifted decisively as the stock dropped below its 200-day moving average, a key technical indicator closely watched by traders. Although shares briefly reclaimed this threshold on November 21st, the subsequent decline confirmed selling pressure remains dominant. The equity currently trades around NOK 2.38, surrendering earlier monthly gains.

The repeated failure to maintain value above NOK 2.60 demonstrates insufficient sustained buying interest. Investors appear to be using price increases as exit opportunities rather than establishing long-term positions. Technical weakness currently carries more weight with market participants than positive fundamental developments.

Major Contract Fails to Generate Sustained Momentum

Market observers find the current weakness particularly noteworthy given Nel's announcement on November 6th of a substantial $50 million equipment order. The company secured a contract to supply 40 MW of PEM electrolyzer equipment for the HyFuel and Kaupanes projects.

Contract specifications:
* Total value: Exceeding $50 million
* Technology: PEM electrolyzers (MC 500 systems)
* Capacity: 40 MW total (20 MW per project)
* Client: Hydrogen Solutions AS (HYDS) and partners

Following the announcement, Nel shares surged over 20% to reach NOK 2.62 temporarily. However, the subsequent price action revealed this operational success proved insufficient to establish a sustainable valuation foundation. The rapid erosion of this "news premium" underscores prevailing market skepticism regarding the company's path to profitability.

Strategic Partnership Receives Minimal Market Recognition

Further compounding the situation, Nel was confirmed on November 10th as technology partner for two GreenH hydrogen projects located in Kristiansund and Slagentangen. While this reinforcement of the company's position in its domestic Norwegian market represents a strategic positive, capital markets have largely ignored the long-term value implications in the short term.

The current scenario is defined by the disconnect between contract awards and share price performance. While the company's order book shows incoming business, the equity valuation reflects persistent concerns about funding requirements and execution risks. The breach of the 200-day moving average has intensified the downward trend, effectively neutralizing the positive aspects of November's contract announcements.