Reliance Power shares soar over 17% in a week. What fueled the surge & what should investors do?

Reliance Power shares have seen a sharp rally, soaring over 17% in the last one week, buoyed by positive developments in its renewable energy business. The surge comes on the back of the company’s announcement of incorporating GDL – Reliance Solar Pte Ltd (GRSPL), a new associate company under a joint venture structure in Bhutan.

The joint venture, set up in Gelephu Mindfulness City in Bhutan, is a 50:50 partnership between Green Digital Private Ltd, a state-owned enterprise of the Royal Government of Bhutan, and Reliance Enterprises Private Ltd (REPL).

REPL has subscribed to 225,000 shares, translating into Reliance Power indirectly holding 25% in GRSPL. The company said this move falls within the renewable and green energy sector and is expected to expand Reliance Power’s international footprint in clean energy projects.


With this addition, Reliance Power’s combined clean energy pipeline now stands at over 3 GW of solar DC capacity and 3.5 GWh of battery energy storage system (BESS) capacity, consolidating its position as India’s largest integrated solar + BESS player.

After this surge, what should the investors do?

Vatsal Bhuva, Technical Analyst at LKP Securities, said, "RPOWER, after a sharp correction, had slipped into the extremely oversold zone with RSI hitting 23. It is now witnessing a strong recovery, reclaiming its 21-DMA placed at 49.20. The momentum indicator MACD has generated a buy crossover, though it remains below the zero line, while RSI has moved up to 48, suggesting that the upward momentum may extend further."

He highlighted that the stock has recently witnessed a consolidation breakout on the daily chart after being in an oversold zone.

“A morning star candlestick has formed on the weekly chart near breakout levels, further confirming bullish sentiment. Additionally, a bullish hidden divergence is observed on RSI. The stock has crossed its 200-day SMA placed at the 46–47 zone, which now acts as strong support along with the 200 EMA. Immediate resistance lies at 53, above which fresh momentum may drive the stock toward 71 levels,” Bhuva added.

Nilesh Jain, Head – Equity Technical & Derivative Research at Centrum Broking, noted, "After a sharp fall, which started in July, Reliance Power has consolidated in the Rs. 42–45 band before breaking out this week. An uptick in daily average volumes supports the move, with potential upside towards Rs. 60 in the best case scenario. However, given the stock’s history of circuit-to-circuit moves, traders should position themselves cautiously, with a stop loss around Rs. 41."

Rahul Sharma, Director, Head – Technical & Derivative Research at JM Financial Services, also pointed to the breakout after the recent consolidation phase, underlining that improving volumes add weight to the upward momentum.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)