Reliance Power Stock Soars 18% as Supertrend Indicator Signals ‘Buy’

May 23, 2025 – Ahmedabad: Reliance Power Ltd. experienced a remarkable 18% surge in its stock price during intraday trading on Friday, driven by robust trading volumes and the activation of the Supertrend indicator, which signaled a ‘buy’ recommendation.

Technical Indicators Fuel Investor Optimism

The Supertrend indicator, a popular tool among traders for identifying potential buy or sell signals based on price trends and volatility, triggered a ‘buy’ signal for Reliance Power. This development suggests a potential upward momentum in the stock’s trajectory.

Complementing this, other technical metrics reinforce the bullish sentiment:

• Relative Strength Index (RSI): The RSI for Reliance Power stands at 83.1, indicating that the stock is in the overbought zone. While this suggests strong buying interest, it also warrants caution for potential short-term corrections.
• Moving Averages: The stock is trading above its 5-day, 10-day, 20-day, 30-day, 50-day, 100-day, 150-day, and 200-day moving averages, underscoring a sustained upward trend.

Fundamental Strengths Bolster Market Confidence

Beyond technical indicators, several fundamental factors have contributed to the stock’s rally:

• Debt Reduction: Reliance Power has aggressively reduced its debt, slashing over ₹2,000 crores in the last two quarters. This move has alleviated financial burdens and enhanced investor confidence.
• Earnings Performance: In its Q1 earnings report, the company reported an 18% year-over-year increase in revenue, reaching ₹3,500 crores. Net profit also saw a significant rise, jumping by 25% compared to the previous quarter to ₹220 crores
• Renewable Energy Initiatives: Reliance Power is making significant strides in renewable energy, particularly in solar and wind projects. The company aims to generate 25-30% of its total revenues from renewable energy in the next three years, aligning with India’s push for clean energy.

Market Sentiment and Future Outlook

The confluence of positive technical indicators and strong fundamentals has created a favorable environment for Reliance Power’s stock. Analysts are forecasting a 15-20% growth in revenue over the next fiscal year, buoyed by higher demand in the energy sector and the company’s expansion into renewable energy.

From a technical analysis perspective, the stock has broken through key resistance levels and is now targeting the ₹25 mark. If it surpasses this level, it could open up further gains towards ₹30 in the near future. On the downside, support lies around ₹20, and any pullback could attract buying interest from long-term investors.

Investor Considerations

• Short-Term Traders: With technical indicators pointing to further gains, traders looking for momentum should watch for a breakout above ₹25. However, risk management is key as the stock could face short-term volatility.
• Long-Term Investors: Reliance Power’s debt reduction, combined with its push into renewable energy, presents a favorable outlook for those with a long-term horizon. With expected growth of 15-20% in revenue and an increasing focus on profitability, the stock could offer substantial returns over the coming years.

Conclusion

Reliance Power’s recent 18% surge, underpinned by both technical and fundamental strengths, highlights the company’s potential in the evolving energy sector. As it continues to reduce debt and invest in renewable energy, the stock presents opportunities for both short-term traders and long-term investors. However, as with all investments, due diligence and risk assessment remain paramount.