The decline follows a sharp three-day upswing, fuelled by heavy volumes and renewed investor interest. On Monday, JP Power rose 4.7% to Rs 24.75, extending a rally that had seen the stock hit a new 52-week high of Rs 24.86 on Friday.
Technical indicators also point to a potential cooldown. The stock has been trading above all key simple moving averages, from the 5-day to 200-day marks, while the Relative Strength Index (RSI) has touched an elevated 89.8, a level widely seen as overbought.
The Moving Average Convergence Divergence (MACD) remained positive at 2.1, reinforcing near-term bullishness, but analysts had warned of the likelihood of a pullback.
Adani bid, resolution buzz fuelled rally
The recent rally was partly driven by reports that the Adani Group had submitted a bid to acquire the debt-laden Jaiprakash Associates, a compnay linked to JP Power via a corporate guarantee on a $150 million external commercial borrowing, which was later converted into a rupee loan.
Jaiprakash Associates is undergoing insolvency proceedings and has reportedly drawn interest from six bidders: Adani, Vedanta, JSPL, Suraksha Group, Dalmia Bharat and PNC Infratech. The proposals are believed to be for acquiring the company in full, raising hopes of clarity on liabilities that could benefit JP Power.
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Analyst view: Resistance ahead, accumulation evident
Kunal Kamble, Sr. Technical Research Analyst at Bonanza Portfolio, had earlier said that JP Power has broken out of a 17-month consolidation zone, supported by rising volume that reflects increased buyer interest.
Kamble had noted that the stock is nearing a crucial resistance at Rs 24, and a decisive close above this level could unlock stronger upside momentum.
“The stock’s position above key exponential moving averages reflects bullish sentiment, with the recovering monthly RSI indicating renewed strength,” Kamble added, pointing to strong accumulation. He projected fresh entry potential above Rs 24, with a stop-loss at Rs 17, and sees possible medium-term upside to Rs 38–45 if momentum persists.
Despite Tuesday’s decline, the stock remains up 42.5% in 2025 so far and has delivered a 1364% return over the past five years. The stock is up 46% in 2025 so far.
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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
