Suzlon Energy shares gain 24% in 30 days. Rs 11 a tough resistance, but analysts stay optimistic

Shares of Suzlon Energy have jumped 24 per cent in a month, which has helped the scrip register positive returns for 2022, after a weak first half of the calendar. If technical indicators were to go by, analysts see tough resistance for the stock at Rs 11 apiece. If the stock manages to break above the level, analysts foresee the stock moving towards Rs 14-16 level in coming months.

Independent Analyst Manish Shah said price action in the case of Suzlon Energy suggests that price faces a major barrier at a resistance of Rs 10-11 region.

The issue with the Suzlon Energy stock is that, historically, its share price has never seen a dependable bull run and a rally tends to fizzle out after seeing a short period of gains, he noted.

"This time around Suzlon Energy can be a good setup for a medium term play with a holding period of 3-6 months. Price seems to be breaking out of a rounding bottom pattern, which is a trend reversal pattern," Shah said.

The stock price is also breaking out of a long term trendline starting from 2015 on the weekly charts. A break out from the resistance zone at Rs 10-11 would mean a spurt to Rs 16 and above that to Rs 20. Keep a stop below Rs 8 and hold for 3-6 months, Shah advised traders.

Pravesh Gour, Senior Technical Analyst, Swastika Investmart said the counter has broken out of the rounding bottom formation, forming a "U" shape on the longer time frame, which indicates the end of extended downtrends and could indicate a reversal in long-term price movements.

The overall structure looks lucrative at current levels, he said.

"With the increase in volume, it has also given a bullish inverse head and shoulders breakout on the daily chart. The stock is facing resistance at the Rs 11 level; above this, we are expecting a long run-up towards the Rs. 14 level. On the downside, at any correction, Rs 8 is major support, while Rs 7.25 is the next critical support level. Momentum indicators are positively poised to support the current strength," he said.

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