Norwegian hydrogen specialist Nel ASA finds itself navigating a complex market paradox. Despite securing multi-million dollar contracts, the company’s share price continues to hover precariously around the €0.20 threshold, demonstrating investor indifference toward operational achievements.
Industry Headwinds Offset Progress
The broader hydrogen sector faces mounting pressure, contributing to Nel ASA’s valuation challenges. Energy giant Exxon Mobil recently delivered a significant blow to market sentiment by canceling a major planned facility due to insufficient demand. Such retreats by industry leaders substantially impact pure-play hydrogen companies like Nel ASA.
Current market conditions present several obstacles:
* Sector sentiment: Cooling enthusiasm for hydrogen investments
* Corporate caution: Major energy players scaling back ambitious projects
* Investor patience: Growing demands for clearer profitability pathways
Substantial Contracts Fail to Impress
During November, Nel ASA announced noteworthy business achievements that would typically drive investor optimism. The company secured a firm purchase order valued at over $50 million from Kaupanes Hydrogen AS and HyFuel AS. This agreement involves supplying PEM electrolyzer equipment, validating market acceptance of Nel’s technological capabilities.
Further strengthening its market position, Nel ASA reinforced its collaboration with GreenH AS. As technology provider for two major projects located in Kristiansund and Slagentangen, the company will deliver 20 MW of electrolyzer capacity.
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Despite these concrete business victories, equity markets have remained unresponsive. Instead of sustained price appreciation, stagnation prevails—a concerning indicator of institutional investor reservation.
Technical Picture Reveals Persistent Weakness
The share price trajectory paints a troubling technical landscape:
- Critical support: The psychologically significant €0.20 level is being fiercely defended
- Price action: Intraday rallies consistently face selling pressure
- Dominant trend: Bearish momentum persists absent a decisive breakout
- Trading range: Fluctuations around €0.20 / 2.39 NOK continue
This resistance to positive fundamental developments suggests major investors await more definitive signals of margin improvement and sustainable profitability.
Credibility at Stake
Nel ASA confronts a critical test of market confidence. While the company demonstrates an ability to sell its technology effectively, this commercial success fails to translate into share price performance. Until the stock achieves a high-volume breakout above key resistance levels, the downward trend remains the prevailing technical reality. The disconnect between operational achievements and market valuation presents both a challenge and potential opportunity for long-term investors.
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