- Reliance Power share price dropped nearly 5% from its highest since April 2015. We tell you why the incentive to buy the stock is still strong
Reliance Power share price dropped down sharply on Tuesday, down by 4.32% and trading at Rs 58.88 at the time of writing. The decline comes a day after the stock hit its highest level since it hit ten-year highs of Rs 62.80. Nonetheless, it has a strong bullish undercurrent, having gained 45% in the last month and up by 38% year-to-date. In comparison, the BSE Power Index is down by about 10% since the year began.
The company’s share price upsurge was propelled by multiple high profile deals. In mid-May, Reliance Power’s renewable energy portfolio added Bhutan’s largest solar power projects ever to its order book. The 500 MW, Rs 2,000 crore ($240 million) project is to be done via a joint venture with Bhutan’s Druk Holding and Investment (DHI). Last week, Reliance Power (NSE: RPOWER) bagged a contract to construct 350 MW Interstate Transmission infrastructure via a subsidiary, Reliance NU Energies.
Collectively, Reliance Power has about 1,550 Megawatts (MW) of orders won year-to date, valued at more than Rs 12,000 crore (approximately $1.4 billion). That provides a strong foundation for Reliance Power share price to stay on the uptrend in the medium term. However, on the downside, the stock’s rapid rise in recent days, including 24% jump in the previous three sessions could entice investors to book profit in the near-term, especially in view of the recurrence of trade tariff fears.
Reliance Power Share Price Prediction
Reliance Power share price pivots at Rs 58.77 and the momentum signals control by the buyers. The stock will likely encounter initial resistance at Rs 62.20, but a stronger momentum could break above that level and send the action higher to test Rs 65.20.
On the other hand, going below Rs 58.77 will shift the momentum to the downside. That will likely see the first support formed at Rs 56.00. Breaking below that level will invalidate the upside narrative. In addition, such momentum could extend losses to test the second support at Rs 53.00.
