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Torrent Power shines on the bourses

Vinayak Gangule
/ Categories: DSIJ Mindshare
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Torrent Power shines on the bourses

Torrent Power sparked in Tuesday’s trading session as it informed bourses that it has received an approval from Gujarat Electricity Regulatory Commission (GERC) for the power procurement arrangement of 278 MW between the company's UNOSUGEN Power Plant (capacity of 382.5 MW) and its Licensed Distribution Business for cities of Ahmedabad, Gandhinagar and Surat. The approval, with certain stipulations, is for the balance life of the plant, i.e., 19 years.

In the last quarter of FY19, the company’s revenue grew by 4.1 per cent yoy to Rs. 2,925 crore. However, due to higher effective tax the company profit after tax tanked 89 per cent yoy to Rs. 24 crore.

With this positive development, the stock of Torrent Power surged on the exchange and was one of the top gainers of BSE. It surged nearly 14 per cent from the previous close to touch an intra-day high of Rs. 275.9. The stock settled for the day at Rs. 272.05 apiece, up by almost 12.42 per cent.

Torrent Power is an integrated utility engaged in the business of power generation, transmission and distribution with operations in the states of Gujarat, Maharashtra and Uttar Pradesh.

 

Technical analysis: 

Torrent Power has given symmetrical triangle breakout on the daily time frame. This breakout was confirmed by the above 50-week average volumes. Additionally, the stock had formed opening bullish Marubozu candle on breakout day, which adds strength to the breakout. The opening bullish Marubozu candle has no shadow extending from the open price end of the body. Opening bullish Marubozu candle indicates extreme bullishness.

With this symmetrical triangle breakout, the stock has also managed to close above its weekly pivot and long-short term moving averages, i.e. 20-day EMA, 50-day EMA, 100-day EMA and 200-day EMA. The leading indicator 14-period daily RSI is currently quoting 69.21 and it is in a bullish zone. The stochastic oscillator is also suggesting some bullish strength as %K is above the %D.  Moreover, the other volume-based indicators like OBV and Money Flow index are also very strong.

Going ahead, the stock has strong support in the zone of Rs. 250-Rs. 248, while on the higher side, the major resistance is placed in the zone of Rs. 276-Rs. 280 level.

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