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Plug Power, Inc. (PLUG) shares rallied about 20% in Monday’s early premarket session, building on the nearly 35% gain seen on Friday. The company provides hydrogen fuel cell energy solutions. 

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Four times the average volume accompanied Friday’s rally in Plug Power stock, lending credence to the upside, which came after a Wall Street firm notably increased the price target for the stock. H.C. Wainwright increased the price target for the stock to $7 from $3 on Friday, citing "significant" increases in electricity prices, as well as the regulatory support and market demand for nuclear power that have emerged over the last six months, according to a summary of the note on The Fly.

The analysts at the firm also flagged a potential short-squeeze. According to Koyfin, the short interest in Plug Power stock is 30.30%, only slightly off its all-time high of 31.4% seen in March.

The sharp rally since mid-September has helped the stock erase its year-to-date losses, and it is now up approximately 79% for the year. The company recently reported that production levels at its Georgia hydrogen facility have reached a record high. It also amended its at-the-market equity sales agreement, allowing the issuance of up to $1 billion in common stock.

Wall Street analysts, however, are not optimistic about Plug Power. The average analysts' price target for the stock is $2.42, according to Koyfin, implying roughly 37% downside from Friday's close. The recent rally has put Plug Power stock in extremely overbought territory, with the 14-day relative strength index (RSI) showing a reading of '83.'  A reading above 70 on the RSI suggests that the stock has risen too much and too quickly.

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