Technical analysts were divided over Suzlon Energy as one said the stock has upward potential while another said the stock might face resistance at its current price.

What Happened: Suzlon Energy after its stellar run in the bourses had faced a small correction in the last month. The stock has gained over 88% in 2024 so far and has fallen 10% in the last month.

The fall comes despite the wind energy major bagging a major contract from Jindal Renewables Power earlier in October. Suzlon will provide 127 wind turbine generators (WTGs) with Hybrid Lattice Tubular (HLT) towers, each having a capacity of 3.15 megawatts. The company is also said to be in the running for a massive order from Tata Power.

Technical Views: Anshul Jain, head of research at Lakshmi Shree said the recent correction in the stock with low volumes pointed out the weakness in the correction. “Suzlon is showing signs of strength after testing a major support at ₹66. The stock is now attempting to form a higher low around the previous swing low of ₹72.5, indicating bullish momentum,” He said.

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Notably, the recent correction occurred on lower volumes, while the current rally is attracting higher volumes, reinforcing this positive outlook. With a buy recommendation at the current price, the stock has a stop loss at ₹65 and a target of ₹84-86. A sustained move above ₹85 could push the stock to test ₹109, offering strong potential upside,” Jain added.

Jigar S Patel, senior manager – technical research analyst, Anand Rathi Shares and Stock Brokers suggested a wait-and-watch approach as the stock may face resistance in the near term. “Recently, Suzlon experienced a bearish divergence around the 86 level, signalling a potential reversal in price momentum. Following this divergence, the stock underwent a correction of approximately 23%, pulling back to around 66”, Patel said.

“Currently, Suzlon is trading within the Ichimoku Cloud, which is often used to identify key support and resistance levels. The upper boundary of this cloud, coinciding with the 50-day Exponential Moving Average (DEMA), is likely to act as a strong resistance in the near term. Additionally, the Relative Strength Index (RSI) on the daily chart remains below the 50 mark, raising concerns about ongoing weakness. Given these indicators, the 66 level could be considered a potential support and entry point for a new position. However, a wait-and-watch approach is recommended for now”, the analyst added.

Suzlon’s price band was revised to 10% from 5% in early October.

Price Action: Shares of Suzlon Energy fell 0.41% to ₹72.71 on Friday.

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