Suzlon Energy Shares Rise for 4th Session: Technical Analysis, Price Targets, and Stop Loss
Contents
Stock Performance : Suzlon Energy shares have continued their upward trajectory, rising 3.5% to a new 52-week high of ₹79.30 from the previous close of ₹76.58 on the Bombay Stock Exchange (BSE). This marks the stock’s fourth consecutive day of gains. The stock crossed the ₹1 lakh crore market capitalization threshold for the first time on Friday and almost touched the ₹80 mark in early trading today.
Key Metrics:
- Current Price: ₹79.30
- Previous Close: ₹76.58
- Market Capitalization: ₹1.07 lakh crore
- Turnover: ₹69.39 crore with 89.62 lakh shares traded
- 52-Week High: ₹79.30
- 52-Week Low: ₹19.30 (August 14, 2023)
- One-Year Gain: 292%
- Three-Year Gain: 1,218%
- Beta: 0.8 (indicating lower volatility)
Technical Analysis:
- Moving Averages: Suzlon Energy is trading above its 5-day, 10-day, 20-day, 50-day, 100-day, and 200-day moving averages, indicating a strong bullish trend.
- Relative Strength Index (RSI): The RSI stands at 77.3, signaling that the stock is currently in the overbought zone. An RSI above 70 typically indicates overbought conditions.
Technical Analysts’ Insights:
- Shiju Koothupalakkal, Technical Research Analyst at Prabhudas Lilladher: The stock has shown a strong uptrend, moving past the target of ₹71. With a higher low formation pattern visible, potential targets are ₹82 and ₹98. A near-term stop loss is suggested at ₹71.
- Om Mehra, Technical Analyst at SAMCO Securities: Suzlon Energy has broken the resistance level of ₹70 and is trading strongly above the 20-day and 50-day moving averages. A short-term correction towards ₹71-72 could be an ideal buying opportunity. As long as the stock remains above ₹65, the positive trend is expected to continue.
- Aditya Agarwal, Head Derivatives & Technical at Sanctum Wealth: The long-term outlook for Suzlon is positive, with potential moves towards ₹94-102 in the coming months. In the short term, the stock is overbought and trading near resistance levels of ₹80-82, suggesting potential profit-taking. For fresh entries, levels around ₹70-68 are recommended, with a trailing stop loss at ₹64.
- Rahul Ghose, CEO of Hedged.in: Suzlon’s stock momentum could drive it to ₹84 in the short to medium term. Although the stock is slightly overbought, the uptrend remains strong. If momentum indicators show cooling near ₹84, the next target could be ₹89. Positive quarterly results have also contributed to the bullish outlook.
- Jigar S Patel, Manager at Anand Rathi Securities: The stock shows promising momentum but caution is advised due to its significant rise above key moving averages. A potential pullback to the average price levels could occur, with support identified at ₹65. A stop-loss should be placed below ₹61, and the anticipated upside target is ₹80.
- Laxmikant Shukla, Technical Research Analyst at YES Securities: Shukla is bullish on Suzlon Energy, suggesting a buy with a price target of ₹80. He recommends a stop loss at ₹65, noting that the stock has found stability after recent declines and is trading above key moving averages, indicating a bullish trend.
Brokerage Recommendations:
- Geojit: The brokerage has a ‘buy’ rating on Suzlon Energy, anticipating strong order inflows driven by government tenders and commercial customers. They forecast a revenue CAGR of 53% and EPS growth of 66% CAGR for FY24-26E, with ROE improvement.
Advantages:
- Strong Performance: The stock has risen significantly, showing impressive gains over one and three years, indicating strong performance and market confidence.
- Bullish Technical Indicators: Trading above all major moving averages and a robust RSI suggest continued bullish momentum.
- Positive Long-Term Outlook: Analysts anticipate further gains, with potential targets reaching up to ₹102 in the coming months.
- Supportive Fundamentals: Geojit forecasts strong revenue and EPS growth, enhancing the stock’s attractiveness.
Disadvantages:
- Overbought Conditions: An RSI above 70 indicates the stock is overbought, which may lead to a short-term correction or consolidation.
- Potential for Profit-Taking: The stock is trading near resistance levels, suggesting that some investors might start booking profits.
- Risk of Pullback: Given the significant rise, there is a risk of a pullback to average price levels, which could impact short-term investors.
- Volatility: Despite a low beta, recent high volatility may concern risk-averse investors.
Conclusion: Suzlon Energy’s stock has demonstrated remarkable growth, reaching new highs and showing strong bullish trends. While technical indicators and analyst forecasts suggest continued upside potential, the stock’s overbought condition warrants caution. Investors should be prepared for potential short-term corrections and consider stop-loss strategies to manage risk. The long-term outlook remains positive, with significant potential for further gains based on strong fundamentals and market conditions.
FAQs
Q1: What is driving the recent rise in Suzlon Energy’s stock price? A1: The stock’s rise is driven by strong performance, bullish technical indicators, and positive market sentiment. Analysts are also optimistic about the company’s long-term prospects and order inflows.
Q2: What should investors watch for in the short term? A2: Investors should watch for potential short-term corrections or consolidations due to the stock’s overbought condition. Monitoring resistance levels and RSI will be crucial.
Q3: How should investors manage risk with Suzlon Energy shares? A3: Investors should use stop-loss strategies to manage risk, considering placing stop-loss orders at levels like ₹65-64 to protect against potential declines.
Q4: What are the long-term prospects for Suzlon Energy? A4: The long-term prospects are positive, with analysts forecasting further gains and strong revenue and EPS growth. The renewable energy sector’s performance and government support add to the positive outlook.
Q5: Are there any concerns regarding Suzlon Energy’s current stock price? A5: Yes, the stock is currently in the overbought zone, which could lead to a short-term correction. Additionally, significant recent gains may attract profit-taking, impacting the stock price temporarily.
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