Adani Power - Charging up - BUY

India Infoline Research Team | Mumbai | February 23, 2015 16:52 IST

The bullish breakout has also been accompanied with a solid surge in traded volumes.

CMP Rs55, Target Rs68, Upside 23.6%
 
Adani Power has been in a constant declining mode after hitting its intermediate high of Rs68 in May 2014. During this correction phase the stock went on to breach its critical moving averages even the 200 DMA. However, for the first time in over eight months, Adani Power has shown some signs of bottoming out.
 
During this bottoming out process, the stock hit a low of Rs38 in December 2014 which marked the end of declining trend for Adani Power. Since then the stock has been upbeat and has broken out of an Inverted Head & Shoulder pattern. The stock breached its neckline which was placed at Rs53.5 on February 19, 2015 confirming the bullish breakout.
 
The bullish breakout has also been accompanied with a solid surge in traded volumes. The other oscillator like RSI is also trading well above the 65 mark which indicates strength in the current up-move. This further accentuates our bullish stance on the stock.
 
Given the above evidence, we expect Adani Power to rally to a potential target of Rs68 in the near term. We advise a strict Stop Loss of Rs48.5 on every long position.
 


***Note: This is a NSE Chart

 

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