- Summary:
- Suzlon Energy share price rose by more than 7 percent in afternoon trading, boosted by earnings sentiment. But what are the risks?
Suzlon Energy share price registered its biggest daily gain this year on Monday, driven by a positive sentiment surrounding its earnings call. Suzlon Energy (NSE: SUZLON) was up by 7 percent at the time of writing, trading at Rs 72.14. Notably, it rejected downward pressure at the Rs 66 support level for the third straight session, adding credence to the likelihood of a reversal.
Despite performing well year-to-date with gains of 86 percent, Suzlon Energy share price has been on a downtrend in the last month. As a result, it is down by about 12 percent in the last month. However, that performance is largely a market-wide phenomenon attributed to profit taking in the Indian stock market after a strong rally between March and mid-August.
Suzlon’s strong order book affirms that its gains this year are founded on healthy fundamentals. The company will release its second quarter results today, and investors are upbeat that the order book could help it register another forecast-beating result. On the downside, however, the high expectations could exert pressure on the stock after the results release if the earnings come out soft.
The Indian renewable energy Industry is upbeat, supported by the government’s incentives. In addition, the government is focusing on having 50 percent of the country’s energy generated from renewable sources by 2030. That signals a potential strong performance by Suzlon beyond the near-term.
Suzlon Energy share price prediction
Suzlon Energy share price will likely continue with the upward momentum if the action stays above the 70.35 pivot point. In that case, the price could move higher to meet the first barrier at 71.56. However, a stronger momentum could break above that mark and test 72.50.
Conversely, the sellers will take control if the price breaks below 70.35 That could see the establishment of the first support at 69.30. However, if that control is extended, it could enable a break below that level, invalidating the upside narrative. Meanwhile, the downside could extend to the second support at 68.40.
