Jaiprakash Associates shares jump 10% today; can stock break above Rs 21 level?

Shares of Jaiprakash Associates Ltd rose sharply in Thursday's trade, halting their four-day losing run. The stock jumped 9.94 per cent to hit a day high of Rs 19.35. At this price, the stock was 7.81 per cent away from its 52-week high of Rs 20.99, a level seen last week on November 16. That said, the counter has given multibagger returns by rallying 194.96 per cent from its one-year low price of Rs 6.56, hit on March 27, 2023.

In a bid to lower its debt burden, the crisis-hit builder recently entered into a pact with ICICI Bank and transferred 18.9 crore shares to the lender, which were pledged with the bank. The private sector lender has an exposure of Rs 3,000 crore to JP Associates – for which ICICI Bank had made full provision.

Prior to this, the Jaypee Group's flagship firm said it has defaulted on loans worth Rs 4,258 crore, including principal and interest amount.

"The total borrowing (including interest) of the company is Rs 29,272 crore, repayable by 2037, against which only Rs 4,258 crore is overdue as on October 31, 2023," the company stated. JP Associates also mentioned that it has been taking tangible steps to reduce the borrowings.

Bourses BSE and NSE have put the securities of JP Associates under the long-term ASM (Additional Surveillance Measure) framework. Exchanges put stocks in short-term or long-term ASM frameworks to caution investors about high volatility in share prices.

On technical setup, support on the counter could be seen around Rs 17-18 levels. On the higher side, strong resistance may be found in the Rs 21 zone. And, a decisive breach above the said resistance level is required for further upside.

Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, "The counter has an excellent setup on a monthly scale. On a weekly scale, price action is above all major exponential averages, which hints towards a bullish bias in the coming few weeks. One can buy in the zone of Rs 16–20 for the upside target of Rs 30-32. Stop loss would be at Rs 12."

AR Ramachandran from Tips2trades said, "Jaiprakash Associates is bullish on daily charts and has strong resistance at Rs 21. A daily close above this resistance could lead to a target of Rs 25.3 in the near term. Support will be at 17.35."

DRS Finvest founder Ravi Singh suggested that the stock has strong resistance at Rs 21. For this target, one can keep stop loss placed at Rs 18.50, he mentioned.

The counter was last seen trading higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150- and 200-day simple moving averages (SMAs). The scrip's 14-day relative strength index (RSI) came at 62.34. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a negative price-to-equity (P/E) ratio of 4.99 against a price-to-book (P/B) value of 0.89.

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

Also read: Vedanta, Tata Steel, JSPL, Hindalco: Metals & mining stocks that CLSA prefers 

Also read: Hot stocks on November 23: PCBL, SunTech Realty, Suzlon Energy, Tube Investments, Cipla and more

Also read: Top 10 stocks to watch on November 23, 2023: Welspun Corp, P&G Health, Mamaearth, Tata Steel and more