Synopsis: Reliance Power shares are down 11% from their 52-week high, trading at Rs. 48.43 after hitting a lower circuit of 5%. Despite this drop, the stock remains overbought, with an RSI of 79 and is above key moving averages.
Reliance Power shares have been on a volatile journey, with the stock hitting a lower circuit of 5% in the current trading session. Closing at Rs. 48.43 on the Bombay Stock Exchange (BSE), down from its previous close of Rs. 50.97, the company's market capitalization fell to Rs. 19,454 crore.
This marks an 11% drop from its 52-week high.
Stock Performance & Technical Indicators:
The stock has been under pressure recently, locking in two consecutive sessions of lower circuits.
On Monday, Reliance Power’s shares were caught at a 5% decline, registering a significant turnover of Rs. 3.13 crore with 6.47 lakh shares changing hands on the BSE.
Despite the recent pullback, Reliance Power shares are trading above key moving averages, including the 5, 10, 20, 30, 50, 100, 150, and 200-day moving averages, reflecting resilience in its longer-term price action.
The stock’s beta value of 0.8 suggests it experiences lower volatility compared to the broader market.
However, the stock's Relative Strength Index (RSI) stands at 79, signalling it is in the overbought zone, which may raise caution among investors. Analysts are now closely watching its support and resistance levels for short-term direction.
Expert Opinions:
Technical research analyst Jigar S. Patel from Anand Rathi suggested that Reliance Power stock has support at Rs. 46 and resistance at Rs. 50.
A decisive close above Rs. 50 may lead to further upside potential, possibly pushing the price to Rs. 53.
Patel expects the short-term trading range to fluctuate between Rs. 44 and Rs. 55.
On the other hand, Abhijeet Ramachandran, a SEBI-registered research analyst, warned that the stock appears overbought and is showing bearish tendencies on daily charts.
He advised investors to book profits at current levels, noting that a daily close below Rs. 48 could trigger a downward move to Rs. 35 in the near term.
Recent Developments and Milestones:
Reliance Power's recent volatility follows several positive developments.
On September 16, the stock hit the upper circuit of 5% after the company secured a significant 500 MW/1000 MWh Battery Storage Contract from the Solar Energy Corporation of India (SECI).
This contract solidifies Reliance Power’s position as a key player in one of the world’s largest standalone battery energy storage projects.
Further buoying investor sentiment, the company announced on September 18 that it had resolved its corporate guarantee obligations related to its subsidiary Vidarbha Industries Power Limited (VIPL), with the total outstanding debt amounting to Rs. 3,872.04 crore.
The resolution came after a settlement with CFM Asset Reconstruction Pvt Ltd., under which 100% of VIPL’s shares were pledged in favor of CFM.
In addition to these developments, on September 19, the company's shares rose by 5% as the board of directors prepared to meet on September 23 to consider raising long-term resources from both domestic and global markets.
Following the meeting, Reliance Power proposed a preferential issue of 46.2 crore equity shares worth Rs. 1,524.60 crore, priced at Rs. 33 per share—a 14% discount from its last closing price.
In its most recent update, Reliance Power announced on October 3 that it would allot Rs. 4,200 crore worth of Foreign Currency Convertible Bonds (FCCBs) to affiliates of Varde Investment Partners through a private placement.
In conclusion, Reliance Power shares are currently navigating through a period of heightened activity and volatility, marked by a mix of positive corporate developments and technical challenges.
While the stock remains overbought on charts, the support and resistance levels outlined by experts offer short-term guidance for investors.
Given the market's reaction to recent corporate announcements and technical indicators, the stock could experience further movement in either direction.
Investors are advised to monitor these signals closely and consult with financial experts before making investment decisions.
Disclaimer: This article is for informational purposes only and should not be taken as financial or investment advice. Please consult with a certified financial advisor before making any investment decisions.
