IREDA shares slip 45% from record high, time for bottom fishing?

Shares of state-run Indian Renewable Energy Development Agency Ltd (IREDA) have slipped 45% from their record high reached in July 2024. The stock is trading neither in the oversold nor in the overbought zone, indicates its RSI, which is at 52.4. A RSI value below 30 signals the stock is trading in the oversold zone and above 70 it signals is trading in the overbought zone. 

In the current session, IREDA stock climbed 0.78% to Rs 168.40 on BSE in the current session. Market cap of the renewable energy stock stood at Rs 45,261 crore. 

IREDA stock touched an all-time high of Rs 310 on July 15, 2024 and a fell to 52-week low of Rs 137 on March 17, 2024. 

Shitij Gandhi, Senior Research Analyst (Technical) at SMC Global Securities advises investors to be cautious whilke dealing in the stock. 

"The stock has seen sustained selling pressure, undergoing a prolonged corrective phase that saw prices decline from Rs 225 level to Rs 140 level over several months. Currently, the stock appears to be establishing a support zone, consolidating near lower levels while remaining well below its 200-day exponential moving average. The price action has confined the stock to a broad trading range between Rs 140 and Rs 180. In the near term, the stock is likely to continue trading within this Rs 140-180 range in the coming weeks. A decisive breakout above resistance or breakdown below support will be crucial in determining the next directional move. Traders should watch for sustained price action above key resistance levels, which could signal a bullish reversal and potential upside momentum. Until a clear breakout or breakdown occurs, a cautious approach is recommended,"  said Gandhi.

Om Mehra, Technical Research Analyst, SAMCO Securities said, "IREDA has been navigating through a period of consolidation following its corrective slide from the February peak. In recent sessions, the stock has been stabilizing, rebounding from the Rs 153-Rs 157 zone and closing the latest session at Rs 167.79.

The price action reflects a measured attempt to reclaim short-term moving averages, with the stock now trading above the 9 EMA and 20 DMA. The daily RSI has edged back above the 50 mark, suggesting that selling pressure has eased and a potential base may be in place. The stock still trades below its 50-day moving average, which continues to act as an overhead barrier. IREDA appears to be in the early stages of bottoming out.

A close above Rs 170 level could provide the necessary trigger for a move toward Rs 176–Rs 180. On the lower side, the Rs 161 band is expected to offer near-term support."

Ravi Singh, Senior Vice President of Retail Research at Religare Broking said, "The stock price traded in a symmetrical triangle pattern on a daily chart with prices facing hurdles near the 185-190 range aligned with the descending trend line. On the daily chart, the strong demand zone is placed near the range of 145-150. Based on the current price action, the preferred strategy would be to adopt a “Buy on Dips” approach and build a long position near the support zone for upside targets around the resistance levels. "

A R Ramachandran, SEBI registered Independent analyst says, "IREDA stock price is slightly bullish on the Daily charts with strong support at Rs 153. A Daily close above resistance of Rs 165 could lead to a target of Rs 184 in the near term."

IREDA is a Mini Ratna (Category - I) government enterprise. It is administratively controlled by the Ministry of New and Renewable Energy (MNRE). IREDA has been actively promoting, developing, and extending financial assistance for new and renewable energy projects, as well as energy efficiency and conservation projects for over 36 years.