JP Power shares soar 29% in 2 days; how much can the stock gain? Tech view

Adani-JAL impact: Jaiprakash Power Ventures stock zooms 29% in two days; tech chart suggests the stock could re-visit July-month highs. Here are the key levels to watch out for.

The share price of Jaiprakash Power Ventures has zoomed 29 per cent in the last two trading sessions from levels of ₹16.60 to an intra-day high of ₹22.79 on Thursday, on the back of heavy trading volume.  The recent buying at the counter has been attributed to the Adani group winning a bid to takeover Jaiprakash Associates. The Gautam-Adani led group has won majority lenders' vote for take over of stressed-assets of Jaiprakash Associates in a ₹14,535 crore bid.  According to reports, Adani group received the highest backing, securing about 89 per cent of creditor votes, followed by Dalmia Cement (Bharat) and the Vedanta Group.  Jaiprakash Associates (JAL), the flagship entity currently in insolvency, holds a 24 per cent stake in Jaiprakash Power Ventures (JP Power). Following the takeover vote in favour of the Adani group, investors are now weighing the potential spillover effects on JP Power. READ MORE  At 11.20 AM, JP Power shares traded at ₹22, up 8.5 per cent on volume of around 41.40 shares on the NSE.  Technically, the JP Power stock is seen trading above its 100-Day Moving Average after a gap of nearly two months. Can the breakout trigger further gains for the stock? Here's what the tech chart suggests.

 

JP Power

Current Price: ₹22  Likely Target: ₹27.70  Upside Potential: 25.9%  Support: ₹21.05; ₹20.40; ₹19.30  Resistance: ₹22.30; ₹22.60; ₹23.85  Apart from breaking above the 100-DMA, JP Power stock is also seen trading above the higher-end of the Bollinger Bands on the daily chart, thus implying that the near-term trend is likely to remain upbeat as long as the stock holds above ₹20.40 levels. 

 

 

  Similarly, the stock is seen attempting a breakout on the weekly trend line; a close above ₹21.05 on Friday shall confirm the breakout. Below which, the super trend line indicator suggests that the short-term trend for the stock is likely to remain positive above ₹19.30 levels.  On the upside, the stock is seen trading near the ₹22.30 - ₹22.60 resistance zone. The stock needs to clear this area for a likely rally towards the July high of ₹27.70. Interim resistance for the stock can be anticipated around ₹23.85.