What's happening: Natural gas-for-transportation refueling leader Clean Energy Fuels' (NASDAQ:CLNE) stock surged 10.5% today, on moderately high trading volume that was about 25% higher than the average over the past few months.
Before today's big jump, Clean Energy's stock has plummeted since the beginning of May, falling by almost half, after doubling in a huge run-up from the beginning of the year. After all the noise, the stock is up about 15% this year:
Why it's happening: In short, it's shorts. Or, at least, it's likely that much of the price volatility is a product of short-sellers exiting the stock in late April, as well as short-term-focused traders moving in and out of the stock -- as you can see in the chart below, which shows trading volume along with the daily stock price:
One of the key drivers behind all that trading in late February and early May? Earnings reports that the market has taken as relatively positive -- or at least short-sellers took as reason enough to move on.
In each of the past two quarters, Clean Energy continued the strong trend of fuel sales growth, and has managed to increase delivered volumes more than 20% year over year, even as cheap oil prices make natural gas' cost advantage over gasoline and diesel -- one of the company's biggest selling points -- less attractive.
Back to the short-sellers, it's worth noting that the percentage of Clean Energy shares held short is on the rise again, as of the most recent data available:
This is more evidence that today's sharp price jump was at least partly driven by short-sellers choosing to exit their positions, especially considering that there wasn't any material news about the company today, or even any positive macroeconomic news to point to.
In summary, it's another reminder that sometimes stocks just move up and down because of what people do, and not because of anything related to the company itself. Furthermore, there's not really any solid way to consistently use this information to inform what the stock will do tomorrow, or in coming weeks. We can guess, but that's really all we can do.
Instead, it's probably better to keep an eye on the long-term prospects.
Jason Hall owns shares of and options for Clean Energy Fuels. The Motley Fool recommends Clean Energy Fuels. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
More from The Motley Fool
The Simple Reason Why I Won't Buy Clean Energy Fuels Corp. Stock
The days of natural gas as a potential transportation fuel may be over.
The 5 Most Important Numbers From Clean Energy Fuels Corp. Earnings
Volume growth, cash flows, and operating expenses are three metrics investors should watch closely. The market seems to be paying the most attention to its big net loss and the number of stations being closed. I'll explain what investors need to focus on.
Why Clean Energy Fuels Stock Dropped 15% Friday
A big earnings miss pollutes Clean Energy's quarter.