CHPT Stock: Should You Continue the Rapid Rise in ChargePoint Stock Price?

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During the April 19 session, Charging point (NYSE:CHPT) jumped significantly from the previous day’s closing price, registering a rise of 7.3%. Some of the excitement could be tied to unusual options activity, specifically $16 strike price calls expiring on April 29, 2022. Open interest here is just 175 contracts, but the Volume for the day was 26,889 contracts, a magnitude difference of almost 154X. This aggressive bet for CHPT stock is, in theory, a positive for the provider of electric vehicle (EV) charging stations.

In addition to the bullish framework, ChargePoint presents many catalysts to the upside. On the environmental front, several scientific organizations are hammering the table on the need to reverse the damage of climate change. Politically, policymakers are under pressure to promote a pivot to clean and renewable energy, which has natural implications for CHPT stock.

Next, the cynical firecracker: Russia’s troubling decision to invade Ukraine has many European leaders looking for an alternative to Russian hydrocarbons. Clearly, one of the best mitigation measures is to reduce the pressing need for fossil fuels. Therefore, a broader Clean Energy overhaul is theoretically a downwind advantage for the CHPT stock.

Despite the positives, ChargePoint is not doing so well on the charts. Over the past year, CHPT stock has fallen 26%. In 2022, it has fallen by almost 16%. And this despite the 32% increase in the CHPT since the day before the Russian invasion. Therefore, it is not very surprising that the bearish activity resumes as well. During the April 18 session, CHPT stock saw unusual option activity for put options at a strike price of $14 with an expiration on June 17, 2022.

Fundamentally, the narrative of the EV grid deployment is not so clear. For example, while Europe is certainly interested in transitioning to clean and renewable energy solutions, it will take time. Therefore, attention is focused on replacing Russia’s hydrocarbon supply chains with another, more reasonable nation.

That’s not to say the CHPT stock isn’t without its intriguing arguments, as mentioned earlier. But it is also not devoid of challenges for management to address.

As of the date of publication, Josh Enomoto had no position (directly or indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to Publication guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto helped negotiate major contracts with Fortune Global 500 companies. Over the past several years, he has provided critical and unique insights to investment markets, as well as various other industries including law, construction management and healthcare.

Karen J. Nelson