Tata Power, Adani Transmission: Is the bull-run over in power stocks?

Earlier this year, Power Grid Corporation, Adani Transmission, Tata Power and Torrent Power scaled record highs, but now are seen trading almost 11 - 22 per cent lower from their respective peaks.

Shares of power generation and distribution companies have underperformed in the last couple of months, as they relinquished to profit booking, and the optimistic sentiment that started in early 2022 is now showing signs of fatigue. 

Post August 2022, except for NTPC, other major players such as Power Grid Corporation of India, Adani Transmission, Tata Power Company and Torrent Power have either traded sideways or drifted lower. 

Earlier this year, Power Grid Corporation of India, Adani Transmission, Tata Power and Torrent Power hit record highs on entering uncharted territories; however, the currrent stock prices are way-off from their respective peaks, down in the range of 11 - 22 per cent.

Going ahead, will these major power players bounce back and resume their bullish bias or will they remain muted?

Here's what the technical charts suggests: 

NTPC Ltd (NTPC)

Likely target: Rs 200 and Rs 220

Upside potential:  14% to 25%

The weekly chart shows the continuation of the robust rally as the “Higher High, Higher Low” pattern seems to overpower the bear sell-off. As per the chart texture, as long as the stock defends the breakout cushion at Rs 160 mark, the buoyant sentiment will continue to see added strength. The overall trend seems headed towards Rs 200 and Rs 220 levels. CLICK HERE FOR THE CHART

Power Grid Corporation of India Ltd (POWERGRID)

Outlook: A breakout could easily spell 20% -25% upside/ downside

The stock price of Power Grid Corporation is seen struggling to surpass the hurdle at Rs 240 conclusively. This incompetence has damaged the upward bias. The stock now attracts selling pressure even near to the barrier and fails to overcome the same, which in turn has further degraded the positive bias. No doubt that the stock has found cushion around Rs 200, which acts as a major support. Going ahead, as long as the trading range of Rs 240 to Rs 200 is not breached, the overall trend could remain sideways for the stock. A breakout could easily results into a Rs 40 to Rs 60 jump/ decline in the stock price. CLICK HERE FOR THE CHART

Adani Transmission Ltd (ADANITRANS)

Outlook: Range-bound trade

In August this year, Adani Transmission has shown a robust intent to rally further, after the broke through the Rs 4,000 mark. However, the stock unexpectedly experienced heavy selling pressure at Rs 4,200 level. Failure to retaliate against this bear attack, the stock dwindled 28 per cent to Rs 3,000-mark. Since then, the stock has been unable to cross its immediate hurdle at Rs 3,500. The trend remains sluggish and only a breakout of the range on either side could reveal the next move. CLICK HERE FOR THE CHART

Tata Power Co. Ltd (TATAPOWER) 

Outlook: Major support at Rs 200

One can stay bullish in Tata Power Co. as long as the stock sustains above the Rs 200 support. The present chart texture indicates major hurdles prevailing at higher levels. Immediate resistance is seen at Rs 240, followed by Rs 250 and Rs 260 levels. Overall, the stock shows a clear intend to surpass these hurdles and stay afloat and resilient amid any sell-offs. CLICK HERE FOR THE CHART

Torrent Power Ltd (TORNTPOWER)

Likely target: Rs 560 and Rs 580

Upside potential:  8% to 11%

The current formation on the daily chart indicates that the stock is lingering near the 200-day moving average (DMA) at Rs 504, with immediate hurdle seen at Rs 519, its 50-DMA mark. The stock did struggle to leap over this 50-DMA couple of sessions ago and continues to face sell-off near the same average. The technical indicator, Moving Average Convergence Divergence (MACD) has reached near the zero line, and if it succeeds to cross the line, the momentum could swirl a positive bias resulting in stock crossing the 50-DMA hurdle. Following the breakout, the stock price could head to Rs 560 and Rs 580 levels. CLICK HERE FOR THE CHART