Adani Green Consolidates: Analyst Eyes Breakout above ₹ 1,300
Adani Green Energy Limited (AGEL), India’s largest renewable energy company, is currently consolidating near ₹984 ahead of its Q1 results. The stock has been trading in a narrow range between ₹750-900, with some analysts seeing a potential breakout above ₹1,300. In this article, we will delve into the current market sentiments, technical analysis, and the potential implications of a breakout above ₹1,300.
Retail Sentiment
On Stocktwits, the retail sentiment on Adani Green is bearish, with many investors expressing concerns about the company’s ability to meet its growth targets. Some investors are worried about the impact of the ongoing COVID-19 pandemic on the company’s operations and cash flows. Others are concerned about the increasing competition in the renewable energy sector, which could lead to lower margins for Adani Green.
Promoters’ Stake
Despite the bearish sentiment, Adani Green’s promoters have increased their stake in the company to 61.91%. This development has raised hopes among investors that the company’s fortunes are about to change. The increased stake by promoters is seen as a sign of confidence in the company’s future prospects and could lead to a rally in the stock price.
Technical Analysis
According to Rohit Mehta, an analyst at SEBI-registered research firm, Adani Green’s stock is forming a base between ₹750-900. Mehta notes that a trend reversal could begin if the stock breaks above ₹1,300. The analyst believes that the stock has been in a downtrend since March 2022, but has been forming a base over the past few months.
Mehta’s technical analysis suggests that the stock is currently trading above its 50-day and 200-day moving averages, which is a bullish sign. He also notes that the Relative Strength Index (RSI) is trading below 50, indicating that the stock is oversold and due for a bounce.
Breakout above ₹1,300
If Adani Green’s stock breaks above ₹1,300, it could trigger a significant rally in the stock price. A breakout above this level would indicate that the stock has finally broken free from its consolidation phase and is poised for a significant upmove. Mehta believes that a breakout above ₹1,300 could lead to a rally to ₹1,500 or even ₹1,800 over the next 12-18 months.
Conclusion
Adani Green Energy Limited is currently consolidating near ₹984 ahead of its Q1 results. While the retail sentiment is bearish, the company’s promoters have increased their stake in the company, which could be a positive sign. Analyst Rohit Mehta sees a base formation between ₹750-900 and notes that a trend reversal could begin if the stock breaks above ₹1,300. If the stock does break above this level, it could trigger a significant rally in the stock price. Investors should keep a close eye on Adani Green’s upcoming Q1 results and technical developments to gauge the stock’s future prospects.
