Tata Power shares fall after five days; tumble from record high; what’s next?

Shares of Tata Power Co Ltd snapped their five day gaining streak as investors booked profit at record highs today. The Tata Group stock hit a record high for the third straight session amid a rally in the market today. Tata Power stock hit an all-time high of Rs 335.80 in the current session. Later, it slipped 3% to an intraday low of Rs 320. The market cap of Tata Power stood at Rs 1.03 lakh crore. In the afternoon session, a total of 31.49 lakh shares of the firm changed hands amounting to a high turnover of Rs 103.29 crore on BSE.

Tata Power stock has gained 46.51% in the last six months. Tata Power stock has risen 43% in a year and climbed 52% this year. The stock has clocked very less volatility in a year with a beta of 0.3.

In terms of technicals, the relative strength index (RSI) of the stock stands at 85.5, signaling the stock is trading in the overbought zone. Tata Power shares are trading higher than the 5 day, 20 day, 30 day, 50 day, 100 day, 200 day moving averages.

Here’s a look at what analysts said on outlook of the stock.

Mandar Bhojane, Equity Research Analyst at Choice Broking said, “Tata Power is presently trading at near an all-time high level having formed a rounding bottom pattern breakout with significant volume. This pattern suggests a robust bullish momentum in the stock.

Moreover, the stock is positioned above key Exponential Moving Averages (EMAs), including the 20-day, 50-day, 100-day, and 200-day EMAs. This alignment above crucial EMAs strengthens the bullish outlook, indicating the potential for sustained upward price movement. Additionally, the Stochastic Relative Strength Index (Stoch RSI) has exhibited a positive crossover from the oversold region, further contributing to the bullish sentiment. The convergence of these technical indicators suggests that the stock may have the potential to reach a target price of Rs 420 in the near term. To manage risk effectively, it is recommended to implement a stop-loss (SL) at Rs 260.”

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Aditya Gaggar, Director of Progressive Shares said,” Consolidation of over 1 year comes to an end with a Cup and Handle Formation Breakout which was confirmed with an uptick in the volume. Looking at the indicators, MACD has given a positive crossover which suggests an extension of the existing uptrend while a reading of 32.81 in ADX shows the presence of a strong uptrend. One can buy the stock at a CMP of Rs 282 with a decline up to Rs 270 for a target of Rs 350″

Abhijeet from Tips2trades said, “Tata Power is overbought and slightly bullish on the daily charts with next resistance at Rs 336. Investors should book profits at current levels as a daily close below the support of Rs 300 could lead to a target of Rs 246 in the near term.”

AK Prabhakar, Head of Capital, IDBI Capital termed Tata Power as one of his top fundamental stock picks. “The company expects its revenue and EBITDA to double by FY27. I think it will be more than double. If a company can double in 4 years, then its 20 per cent CAGR (Compounded annual growth rate). If it is doing the same in 3 years, then it is 25 per cent CAGR,” Prabhakar told Business Today TV.

“The company expects its revenue and EBITDA to be doubled by FY27. I think it will be more than double. If a company can double in 4 years, then its 20 per cent CAGR (Compounded annual growth rate). If it is doing the same in 3 years, then it is 25 per cent CAGR,” added Prabhakar.

Disclaimer: Business Today provides stock market news for informational purposes only and that should not be construed as an investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

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