Penny stock up 25% this July; chart hints at further 50% upside potential

JP Power stock needs to break and trade consistently above ₹23.90 levels to open the doors for a sharper rally towards ₹34 levels, suggests the long-term technical charts.

Shares of Jaiprakash Power Ventures (JP Power), a subsidiary of debt-ridden Jaiprakash Associates, have been buzzing in recent months. JP Power stock has rallied 25 per cent thus far in July in mere 6 trading sessions, and surged over 74 per cent in the last two months.  Stock market analysts have attributed the recent gains at the counter to current insolvency proceedings of the parent company - Jaiprakash Associates - wherein Adani group has emerged as the frontrunner with a bid up to ₹12,500 crore. Apart, from Adani group, Dalmia group is also in the race. READ MORE  On the bourses, so far this fiscal year JP Power has gained 67.3 per cent as against an 8.2 per cent rally on the NSE Nifty 50 index. The stock at present trades near its 52-week high at ₹23.85 levels; while the 52-week low stands at ₹12.35.  However, the stock still trades at a steep discount of 84 per cent when compared to its all-time high of ₹143.40 registered in January 2008.  ALSO READ | ITC vs HUL vs Dabur: Which is the best bet among these FMCG major shares?  Against this background, here's a technical check on JP Power stocks for the likely trend ahead. 

Jaiprakash Power Ventures (JP Power)

Current Price: ₹22.86  Likely Target: ₹34.30  Upside Potential: 50%  Support: ₹21.55; ₹20.25  Resistance: ₹23.90; ₹25.54; ₹27.75; ₹31.60  Given the sharp rally at the counter, JP Power stock is seen trading on a buoyant note on the daily and weekly time-frames. Technical chart suggests that the short-term bias is likely to remain bullish as long as the stock sustains above ₹21.55 levels; whereas the medium-term chart shows a positive bias as long as ₹20.25 levels is held.  ALSO READ | JK Tyre, Timken among 5 smallcap stocks with up to 27% upside potential  At present levels, the stock is seen testing the yearly Fibonacci hurdle around ₹23.90 levels. Breakout and sustained trade above the same can potentially open the doors for a sharp rally towards ₹34.30 levels - which will be 1.682 retracement level of the preceding year.  Intermediate resistance for the stock can be anticipated around ₹25.54, ₹27.75 and ₹31.60 levels, suggests the long-term chart. CLICK HERE FOR THE CHART