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Tata Power, NTPC, PowerGrid: Are power sector stocks likely to dip further?

Power Sector
A new ceheme for the ailing power sector could be on the anvil, which will be aimed at better infrastructure, smart meters, and a private franchisee model for improving power supply in states. This, according to reports, is likely have an estimated capital outlay of Rs 2-2.5 trillion and may replace UDAY (Ujwal DISCOM Assurance Yojana), which ends in March 2020. READ MORE ABOUT IT HERE

Meanwhile, electricity generation, according to an Equinomics Research note, declined 13% in October reflecting weakness in Indian economy. The outstanding dues of discoms, it said, have more than doubled to Rs 74,700 crore as compared to Rs 35,500 crore earlier this year.

In this backdrop, most power sector stocks have been grinding lower at the bourses. Here's how they look on the charts:

NTPC Ltd (NTPC): On Tuesday, the counter hit a new 52-week low and has been losing ground steadily. Not only it trades below the major daily moving averages (DMA) - i.e. 50-DMA, 100-DMA and 200-DMA. but is witnessing selling pressure on every rise. As it trades below Rs 115, which was its crucial support, one can expect downside towards Rs 100 levels in the days ahead. The Relative Strength Index (RSI) has come out of oversold condition, even as the Moving Average Convergence Divergence (MACD) is not showing any positive signs. For an upside, the counter has to close decisively above Rs 115 for five consecutive sessions. CLICK HERE FOR THE CHART

 

Power Grid Corporation of India Ltd (POWERGRID): A breakdown below the Rs 200 level has destroyed the upside potential as per weekly chart. As it hovers around its 200-weekly moving average (WMA) placed around Rs 180, one can expect a rebound in the short term. The MACD breached the signal line on downside, the weekly chart shows. The RSI trades in the overbought region as per the daily chart. The immediate resistance falls around Rs 185 level and support comes in around Rs 175. CLICK HERE FOR THE CHART

 

Adani Transmission Ltd (ADANITRANS): The counter is on an uptrend and has been scaling new highs. The volume scenario indicates that the buying momentum is gaining strength at higher levels. One can remain positive till counter trades above Rs 300 on a closing basis. The medium-term trend suggests a rally towards Rs 390 and Rs 410 levels. CLICK HERE FOR THE CHART

 

Torrent Power Ltd (TORNTPOWER): If the counter breaks Rs 265, which is its trading support, then may fall towards Rs 255 and then Rs 240 levels. The stock is hovering around its 200-DMA placed at Rs 271.10 levels. The MACD has fallen under the signal line, indicating a weak trend.  CLICK HERE FOR THE CHART

 

Tata Power Co. Ltd (TATAPOWER): The stock can move higher it decisively closes above Rs 54.50 levels. Till then, it can retest the earlier support of Rs 50.30 levels. The short-to-medium term trend looks bearish and a break below Rs 50 may see more selling pressure. CLICK HERE FOR THE CHART



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