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The entire session so far is keeping investors on their toes as the market is seesawing up and down, without any clear direction. index is trading flat for the day so far and the sectoral breadth is also mixed. However, there is one pocket that is giving a crystal clear direction – the Adani Group stocks.
The entire pack is gaining good momentum and one of them that is looking quite good from the technical perspective is Adani Transmission Ltd (NS:). It is a power transmission company with a market capitalization of INR 91,715 crore and currently trades at a TTM P/E ratio of 73.64.
Image Description: Daily chart of Adani Transmission with volume bars at the bottom
Image Source: Investing.com
All the group companies took a heavy toll at the beginning of the year amid Hindenburg Research’s report alleging the group for breaking the laws governing the shareholding pattern of listed entities in the country. A few days back, Deloitte also resigned as a statutory auditor from one of the Adani Group’s companies which also negatively impacted all group companies.
However, it seems like investors have taken everything into consideration and are still willing to make bets on these stocks. The share price of Adani Transmission rose over 6% to INR 872, by 2:30 PM IST and it surged past the resistance of a sweet rounding bottom chart pattern. This price action is depicting a clear reversal on the charts, and as the stock is trading at beaten-down levels, the magnitude of the rally could be high.
Today’s breakout holds a higher importance because of Friday, which simply means this rally will also direct the broader trend on the weekly chart.
On the upside, the nearest resistance seems to be present around INR 940 which can be reached in the next week, all thanks to the high volatility of the counter. However, the stock holds the potential to rally back to triple digits shortly.
Read More: F&O Stock Makes ‘Triple Top’ at ATH; Time for a Correction?
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