Tata Power shares rebound 93% from 52-week low; buy, sell or hold?

Shares of Tata Power have surged 93% from their 52-week low in a year. Tata Power shares surged to a high of Rs 447.70 today against the 52-week low of Rs 228.10 reached on August 16, 2023. The Tata Group firm will also report its Q1 earnings today. The Tata Power stock surged over 2% to Rs 447.40 ahead of earnings. 

Market cap of Tata Power crossed the Rs 1.41 lakh crore mark on BSE. A total of 2.90 lakh shares of the firm changed hands amounting to a turnover of Rs 12.86 crore. Tata Power stock declined to a 52-week low of Rs 228.10 on August 16, 2023 and hit a record high of Rs 470.85 on August 2, 2024. 

The power sector stock has gained 35% in 2024 and risen 89% in a year.

In terms of technicals, the relative strength index (RSI) of Tata Power stock stands at 48, signaling the stock is trading neither in the oversold nor in the overbought zone. Tata Power shares are trading higher than the 20 day, 50 day, 100 day and 200 day but lower than the 5 day moving averages.

Analysts are mostly bullish on the Tata Group stock.  

Hardik Matalia, Derivative Analyst at Choice Broking said, "It is recommended to consider buying on dips near the immediate support level of Rs 435, with a stop loss set at Rs 420. If the stock manages to hold above the recent high of 472, it could potentially advance toward an upside target of 535 to 550. The Relative Strength Index (RSI) stands at 48, indicating that the stock is not in an overbought condition and thus has room for further upward movement. Additionally, the stock has bounced from its short-term (20-Day) Exponential Moving Average (EMA), signalling strong support at these levels.
Given the current technical indicators and price action, Tata Power appears well-positioned for a potential upward move. The target price of Rs 535- Rs 550 aligns with resistance levels and offers a favourable risk-reward ratio, making this a promising trading opportunity."

Shiju Koothupalakkal, Technical Research Analyst, PL Capital - Prabhudas Lilladher said, "The RSI is on the rise indicating strength and with much upside potential visible, we anticipate further rise for next higher targets of Rs 495 and Rs 522 levels in the coming days. Rs 442 zone is the important support level."

Kushal Gandhi, Technical Analyst, StoxBox is bullish on the Tata Power stock with a price target of 520.

"Tata Power shares have experienced a substantial increase of over 100% from the October 2023 lows, followed by a subsequent consolidation phase within a 20% range. This indicates steadfast support from committed investors, preventing drawdowns beyond 20% and suggesting ongoing accumulation to reinforce the prevailing trend. The emergence of a bullish double-bottom breakout from the consolidation phase is a positive development. The stock has shown improved earnings per share (EPS), price strength, and heightened buyer demand. We recommend initiating a purchase of Tata Power shares with a target price of Rs 520 and a stop loss set at Rs 441," said Gandhi.

Om Mehra, Technical Analyst, SAMCO Securities said, "The daily RSI is positively skewed at 62. The daily upper Bollinger Band is placed at Rs 475, acting as minor resistance, and a break above this level could see the stock stretch towards Rs 500-520 in the coming weeks."

Jigar S Patel, manager at Anand Rathi said, "Support will be at Rs 450 and resistance at Rs 471. A decisive close above the Rs 471 level may trigger a further upside to Rs 485. The expected trading range will be between Rs 440 and Rs 480 for short-term."