Tata Power shares test key support level; where is the stock headed?

Shares of Tata Power Company Ltd are trading at their key support level of Rs 218 today, a level which they briefly breached on the downside in the previous session. The stock has arrived the support level after a gap of 12 sessions. Tata Power stock hit an intraday low of Rs 217.55 on Thursday, before closing at Rs 219.50 on BSE. They touched an intraday high of Rs 221.50, also the opening level in the previous session. 

The breach of support level has turned sentiment bearish toward the stock, say analysts.  

Here’s a look at the possible direction of the stock, according to experts. 

Abhijeet from Tips2Trades said, "Tata Power looks bearish on the Daily charts with strong support now at Rs 216. A daily close below this support could lead to a target of Rs 204. Strong resistance will be at Rs 224.3."  

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Rohan Shah, Technical Analyst, Religare Broking said, "The stock bottomed out around Rs 180 levels on March 28, 2023 and post that, it has been gradually inching higher forming a series of higher highs and higher lows. The stock has witnessed minor profit booking after forming a higher high. The decline has led the price to drop towards the crucial support zone of Rs 218-214, which coincides with its previous swing low and medium-term moving average. Thus, going forward, if the said support is held well, we may see the price rebounding higher towards Rs 235-240 levels in the near term." 

Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher said, "The stock has slipped slightly from its high level of Rs 232 zone with profit booking seen and has near-term support at around  Rs 217 levels of the important 50EMA where it can consolidate and find stability. Further with a pullback anticipated and a decisive breach above Rs 225 zone shall confirm a positive trend to anticipate for further rise with targets of Rs 234-238 levels."

Ritu Singh, Senior Research analyst, Drsfinvest said, "Tata Power is impacted by the earnings headwind from a fall in global coal costs and limited growth concerns in an attempt towards a greener future. The stock price may see further weakness towards the levels of Rs 190 in the coming trading sessions."

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In the current session, the Tata Power stock was trading flat at Rs 218.55 on BSE. The Tata Group stock opened flat at Rs 219.30 against the previous close of Rs 219.50 on BSE. Stock of Tata Power has lost 4% in a year and risen 5.25% in 2023. Total 4.46 lakh shares of the firm changed hands amounting to a turnover of Rs 9.76 crore on BSE. Market cap of the firm stood at Rs 69,850 crore.     

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In terms of technicals, the relative strength index (RSI) of the stock stands at 46.9, signaling the stock is neither oversold nor overbought. Tata Power has a one-year beta of 1, indicating average volatility during the period. Tata Power shares are trading higher than the 50 day, 100 day and 200 day but lower than the 5 day, 10 day, 20 day moving averages.       

Tata Power Company is an integrated power company. The company is engaged in electric power generation, transmission and distribution, electronic products, and service businesses. The company’s segments include generation, renewables, transmission and distribution, and others. 

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