Shares of Reliance Power Ltd continued their upward move for the third straight session in Tuesday's trade. The stock climbed 5 per cent to hit its upper price band of Rs 34.45. At this price, it has gained 15.72 per cent in just three trading days.
The sharp upmove in share price came after it was reported that Adani Power had begun talks to acquire a thermal power project in Nagpur once owned by Anil-Ambani's bankrupt Reliance Power.
Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, said, "The counter has been buzzing after a recent news report claimed that Adani Power was in talks to buy Reliance Power's 600 MW thermal plant in Nagpur. It is one of the momentum stocks right now. Investors with a high-risk appetite can hold on to the stock. Fresh buying not advised at current levels."
On technical setup, immediate support on the counter could be seen at Rs 32 level. That said, resistance may be found at the Rs 38 zone.
Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One, said, "The stock has witnessed some strong traction in the last few trading sessions. Currently, the counter is placed at a crucial juncture of a multi-week breakout and a sustainable follow-up buying emergence is likely to trigger the next round of rally in the counter for the Rs 42-45 zone in the comparable period. On the lower end, a series of support zones are placed near the Rs 32-30 sub-zone."
Ravi Singh, Senior Vice-President (Retail Research) at Religare Broking, suggested that the stock has potential to hit an upside target of Rs 38.
Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, "Support will be at Rs 32 and resistance at Rs 35. A decisive close above Rs 35 level may trigger a further upside towards 38. The expected trading range will be between Rs 40 and Rs 30 for the short term."
The counter traded higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-day and 200-day simple moving averages (SMAs). The stock's 14-day relative strength index (RSI) came at 63.61. A level below 30 is defined as oversold while a value above 70 is considered overbought.
As per BSE, the company's stock has a price-to-equity (P/E) ratio of 193.36 against a price-to-book (P/B) value of 1.40. Earnings per share (EPS) stood at 0.17 with a return on equity (RoE) of 0.73.
The company said its consolidated net loss narrowed to Rs 97.85 crore during the June 2024 quarter (Q1 FY25), on account of improved income. It had reported a loss of Rs 296.31 crore in the April-June period of the preceding 2023-24 financial year. It increased its total income to Rs 2,069.18 crore from Rs 1,951.23 crore in the year-ago period.
As of June 2024, promoters held a 23.24 per cent stake in the firm.