Adani Power - A technical perceptive

Adani Power has been one of the strongest mover in the Power Sector. While it was a underperforming stock right after the IPO got listed, the stock started taking off in December 2009 and has been going up relentlessly ever since. Infact addition of the stock in the Derivative Segment seems to have boosted the stock even more in the last couple of days.



Adani Power stock is in a Long Term channel and trending upwards. As long as the trend is not broken, longs can be initiated either at pullback or at breakouts. Either way, stop Loss for Short Term Position would be a close below 120 which would indicate the end of the rally and probably the beginning of a counter rally.

Major Support levels for the stock are 120, 118 and 114. A fall below 110 would mean a entry into a bearish phase.



The above chart is a Relative Strength comparison of all Private Sector Power stocks listed that are on NSE. As one can see, Adani has been one of the strongest movers since Nov09 with the only other stock to beat Adani Power with respect to gains returned being Torrent Power and the weakest stock being Rel Power.

Relative Strength charts are used to determine strength of stock in relation to other stocks in same domain and buy the strongest while selling the weakest. This is a continuing process since stocks can move up and down the hierarchy based on market trends.

Based on current conditions I would rate Adani Power a Buy.

Regards

Prashanth