Adani Power shares jump 26% in 8 consecutive sessions; time to buy, sell or hold?

Shares of Adani Power Ltd on Tuesday continued their upward climb for the eighth straight session, in sync with an overall rise in the domestic equity benchmarks. The stock today rose 5 per cent to hit its upper price band of Rs 236.05. The counter has gained 25.93 per cent in eight days. It has recovered 78.08 per cent from its 52-week low of Rs 132.55, a level seen on February 28, 2023. That said, the scrip has declined 45.46 per cent from its one-year high of Rs 432.80, hit on August 22 last year.

The company said its Board of Directors would hold a meeting on May 5, 2023, to consider and approve the financial results for the quarter and year ended March 31, 2023 (FY23).

Technical analysts were largely mixed on the counter. Vaishali Parekh, Vice-President - Technical Research at Prabhudas Lilladher, said, "Adani Power has witnessed a decent correction from levels of around Rs 429. A decisive move past Rs 264 would improve the bias and anticipate further upward movement for targets toward the 200-DMA (Day moving average), which lies around the Rs 290 level. We suggest buying and accumulating this stock for an upside target of Rs 265–290 levels, keeping the stop loss placed near the Rs 220 level."

On the other hand, AR Ramachandran from Tips2trades said, "Adani Power is overbought and looks slightly bearish on the daily charts with strong resistance at Rs 250. Investors should be booking profits at current levels and wait for a dip near Rs 187 to buy for better returns in the coming weeks."

The stock was last seen trading higher than the 5-day, 20-, 50- and 100-day moving averages but lower than the 200-day moving averages. The counter's 14-day relative strength index (RSI) came at 76.29. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a negative price-to-equity (P/E) ratio of 383.80.

The counter has a one-year beta of 1.26, indicating high volatility.

Adani Group shares saw a massive market value erosion since January 24 this year, when US-based short seller Hindenburg Research released a report alleging stock manipulation and accounting fraud by the Gautam Adani-led conglomerate. Adani Group, however, denied all the allegations.

The stocks then staged a strong rebound after US boutique investment firm GQG Partners announced a cumulative investment of Rs 15,446 crore in four Adani firms -- Adani Enterprises, Adani Green, Adani Ports and Adani Transmission.

Meanwhile, Indian equity benchmarks rose in afternoon trade today, extending their climb for the eighth straight session. The domestic indices traded higher led by strong buying interest in banks, financials, technology, metal and energy stocks.

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