RattanIndia Power shares lose steam after hitting one-year high, dive 10% in 2 days; should you book profit?

RattanIndia Power shares lose steam after hitting one-year high, dive 10% in 2 days; should you book profit?
RattanIndia Power shares lose steam after hitting one-year high, dive 10% in 2 days; should you book profit?

Shares of RattanIndia Power Ltd fell sharply for the second consecutive session in Tuesday’s trade. The share price started tumbling on Monday after scaling its 52-week high of Rs 11.10 during intraday deals. Today, the scrip dropped further 4.95 per cent to hit a lower price band of Rs 9.61 against its previous close of Rs 10.11. It has declined 9.68 per cent in two days. Despite the mentioned fall, this penny stock has emerged 37.88 per cent in the past one month and 213.03 per cent in six months.

In the month of November, RattanIndia Power shares settled higher in 11 out of 15 trading sessions so far. Bourses BSE and NSE have put the securities of RattanIndia Power under the long-term ASM (Additional Surveillance Measure) framework. Exchanges put stocks in short-term or long-term ASM frameworks to caution investors about high volatility in share prices.

In an exchange filing, the company today said it made a loan prepayment. “We wish to inform you that post refinancing of senior secured debt of Rs 1,125 crore, led by Kotak Bank Ltd in the month of June 2023. The company has till date made prepayments of Rs 179 crore and scheduled repayment of Rs 85 crore. Consequent to this, outstanding senior secured debt stands reduced to Rs 861 crore,” it stated.

On the technical front, analysts largely suggested booking profits at current levels. Support on the counter could be seen at Rs 9.75.

“The stock was constantly making higher-top higher-lows, which is a sign of a well-established bull trend. Since the last 2 sessions, it has reversed back after making a bearish, engulfing candlestick pattern on daily timeframe. Having said that , the last two days of reversal look genuine since they are accompanied by massive selling volume. One can book profit in the zone of Rs 9–10 and wait for a meaningful correction for adding longs,” said Jigar S Patel, Senior Manager – Technical Research Analyst at Anand Rathi Shares and Stock Brokers.

“RattanIndia Power is bearish but also overbought on daily charts with strong resistance at Rs 10.15. Investors should book profits at current levels as a daily close below support of Rs 9.75 could lead to drop until Rs 8 level in the coming weeks,” said AR Ramachandran from Tips2trades.

The counter was last seen trading lower than the 5-day simple moving average (SMA) but higher than the 10-day, 20-, 30-, 50-, 100-, 150-, 200-day SMAs. The counter’s 14-day relative strength index (RSI) came at 66.24. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company’s stock has a price-to-equity (P/E) ratio of 23.86 against a price-to-book (P/B) value of 0.96.

The script has a one-year beta of 0.5, indicating low volatility.

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