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Reliance Power Technical Analysis #21: Buy | Target Rs 23 | Arijit Banerjee

OUR RECOMMENDATION

CMP#26.5
IdeaSELL
Sell Range27.2 – 25.85
Target23 – 21
StopLoss*28.45
Duration35 – 40 Trading Sessions
Potential Return^13 – 21%
CMP#IdeaSell RangeTargetStopLoss*DurationPotential Return^
26.5SELL27.2 – 25.8523 – 2128.4535 – 40 Trading Sessions13 – 21%

# CMP on Jan 31, 2019
* Maintain recommended StopLoss by daily closing basis.
   Once 1st target hit, reset StopLoss at 25.
^ The returns are calculated based on CMP#

COMPANY OVERVIEW

Reliance Power Limited together with its subsidiaries engages in the generation and distribution of power in India. Incorporated in 1995, this electric utilty company has two operating divisons: Power Generation and Resource. The power generation generates electricity through thermal power and renewable sources and resource divisons develops and constructs coal mines in India and Indonesia. In Q3FY19, Reliance Power posts 32.59% decline in net profit at Rs 188.27 crore against Rs 279.31 crore in the year-ago period; revenue down 15.81%

Stock Data
NSE CodeRPOWER
Sectoral IndexNifty Infra
52W High48.95
52W Low23.1
Face Value10
Relative Performance_Reliance Power vs Nifty Infra Index

TECHNICAL OBSERVATIONS (WEEKLY)

  • The consolidation phase of the last few weeks has resulted in the formation of a ‘Symmetrical Triangle’ pattern on the weekly chart.
  • The stock has broken out below the Symmetrical triangle pattern triggering a fresh bearish trend.
Reliance Power Weekly Chart
Reliance Power Weekly Chart

TECHNICAL OBSERVATIONS (DAILY)

  • Last few days stock is trading below the 15 days Moving Average and recent closing near the Lower Bollinger Band showing confidence of my view.
Reliance Power Daily Chart
Reliance Power Daily Chart

MONEY MANAGEMENT AND TRADING RULES

1)  It’s advisable not to enter/exit beyond the recommended range.
2)  Strictly follow the StopLoss as mentioned. Honour it.
3)  Use trailing StopLoss to retain profits.
4)  Diversify trading capital into our other technical recommendations.
5)  Risk only the money what you can afford to lose. Hedge accordingly.

ANALYST SUMMARY

The research analysis is prepared by Arijit Banerjee, CMT, CFTe. He is a veteran trader and an active investor having in-depth knowledge in financial market research, advanced technical analysis, market cycle, algorithmic trading and portfolio management. Arijit is a Chartered Market Technician (CMT) accredited by CMT Association USA, the leading global authority of Technical Analysis and has been honoured by Certified Financial Technician (CFTe) from the International Federation of Technical Analysts, USA. SEBI, the regulatory body of Indian financial market also recognizes him as a Research Analyst (INH300006582).

Disclosure

The views expressed herein are based solely on information available publicly/internal data/other sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to accuracy. The recommendations provided herein is solely for informational purposes and are not intended to be and must not be taken alone as the basis for an investment/trading decision. Trading and investing are subject to market risk and the securities discussed and opinions expressed herein may not be suitable for all investors. To read the full disclosure, please click here.

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