IREDA shares fall 53% from record high, oversold on charts; time to buy?

Shares of state-run Indian Renewable Energy Development Agency Ltd (IREDA) have slipped 53% from their record high reached in July 2024. After the correction, the stock is trading in the oversold zone, indicates its RSI which AT 26.6.

A RSI value below 30 signals the stock is trading in the oversold zone and above 70 it signals is trading in the overbought zone. IREDA stock climbed 4.12% to Rs 143.85 on BSE in the current session. Market cap of the renewable energy stock stood at Rs 38,623 crore.

IREDA stock touched an all-time high of Rs 310 on July 15, 2024 and a 52-week low of Rs 124.50 on March 20, 2024.

Jigar S Patel at Anand Rathi said, "Support will be Rs 137 and resistance at Rs 145. A decisive move above the Rs 145 level may trigger a further upside to Rs 150. The expected trading range will be between Rs 137 and Rs 150 for the short-term."

A R Ramachandran, SEBI registered Independent analyst says, "IREDA stock is slightly bullish on the Daily charts with strong support at Rs 137. A Daily close above resistance of Rs 151 could lead to a target of Rs 180 in the near term."

Ameya Ranadive, Chartered Market Technician, CFTe, Sr Technical Analyst, StoxBox said," IREDA is currently trading at Rs 145.23, showing a 5.12% intraday gain. Despite the bounce, the stock remains in a bearish trend, struggling below key moving averages. The 50-day EMA at Rs 172.99, 100-day EMA at Rs 187.39, and 200-day EMA at Rs 187.55 indicate strong resistance ahead, keeping IREDA in a no-trade zone for now."

"Momentum indicators suggest weakness, with the MACD still in negative territory at -11.48, showing no confirmed trend reversal. The RSI at 35.85 indicates the stock is attempting to recover from oversold levels but lacks strong bullish confirmation. For a meaningful upside move, IREDA must reclaim Rs 155- Rs 160 levels with sustained buying volume. On the downside, Rs 137- Rs 125 remains a critical support zone. Until a clear directional breakout occurs, traders should wait for a more decisive trend confirmation before taking positions," added Ranadive.

Hardik Matalia, Derivative Analyst, Choice Broking said, "The stock has been forming lower highs and lower lows, indicating continued bearish pressure. However, it is approaching a crucial resistance zone, where a breakout could signal a potential trend reversal. On the daily timeframe, the stock remains below its 20-day, 50-day, and 200-day EMAs, suggesting that a strong move above these levels is necessary to confirm bullish momentum. The Relative Strength Index (RSI) is at 35.35, showing a reversal from the oversold territory with a positive crossover, which indicates the possibility of a recovery."

"If IREDA manages to break above the Rs 165–Rs 175 range, it could signal a shift in sentiment and open the doors for an upside move toward Rs 190–Rs 200 in the near term. However, failure to sustain above these resistance levels may result in further consolidation or a retest of lower support levels.

For short-term traders, a sustained move above Rs 165–Rs 175 would serve as an ideal entry point, as it could confirm buying interest and indicate some strength. Until then, waiting for a decisive breakout is advisable to avoid premature entries. Long-term investors may consider partial accumulating near Rs 145– Rs 135, as a successful breakout above resistance could drive a strong reversal. Also, if the stock breaks below the recent lows, they can add more on dips, considering the long-term growth potential. However, close monitoring of price action and volume trends will be essential to confirm sustained buying interest," added Matalia.

IREDA is a Mini Ratna (Category - I) government enterprise. It is administratively controlled by the Ministry of New and Renewable Energy (MNRE). IREDA has been actively promoting, developing, and extending financial assistance for new and renewable energy projects, as well as energy efficiency and conservation projects for over 36 years.