Shares of Reliance Power, led by Anil Ambani, have dropped 11% from their 52-week high, with the stock hitting its lower circuit for the second consecutive session on Monday. The stock was locked in a 5% lower circuit, trading at ₹48.43 compared to the previous close of ₹50.97 on the BSE, bringing the company’s market cap down to ₹19,454 crore. A total of 6.47 lakh shares changed hands, resulting in a turnover of ₹3.13 crore on the BSE.

Reliance Power stock has a beta of 0.8, indicating lower volatility over the past year. It continues to trade above its 5-day, 10-day, 20-day, 30-day, 50-day, 100-day, 150-day, and 200-day moving averages. However, with a Relative Strength Index (RSI) of 79, the stock is firmly in overbought territory.

Expert Opinions
Jigar S Patel, Senior Manager and Technical Research Analyst at Anand Rathi, noted, "Support is expected around ₹46, with resistance at ₹50. A strong close above ₹50 could push the stock toward ₹53. The short-term trading range is likely to be between ₹44 and ₹55."

Meanwhile, SEBI-registered analyst Abhijeet Ramachandran advised caution, stating, "Reliance Power is overbought and showing bearish signals on the daily charts, with strong resistance at ₹53.4. Investors should consider booking profits now, as a close below ₹48 may lead to a drop to ₹35 in the near term."

Stock Performance
On October 4, 2024, Reliance Power hit its 52-week high of ₹54.25 before dropping to the lower circuit of 5%, closing at ₹50.97, ending a 15-day winning streak. The stock had been rallying since September 9, driven by multiple positive developments.

Recent Developments
On September 16, Reliance Power hit the upper circuit after securing a significant Battery Storage Contract of 500 MW/1000 MWh from the Solar Energy Corporation of India (SECI), positioning the company as a key player in one of the world's largest standalone battery energy storage projects.

Two days later, investor sentiment surged again after the company was released from a corporate guarantee related to ₹3,872.04 crore of debt owed by its subsidiary, Vidarbha Industries Power Limited (VIPL). Reliance Power also resolved disputes with CFM Asset Reconstruction, pledging 100% of VIPL shares against the release of the corporate guarantee.

The stock continued its upward trend on September 19, gaining 5%, as the board announced plans to meet on September 23 to consider raising long-term funds from both domestic and global markets.

On September 23, the company approved a preferential issue of 46.2 crore equity shares worth ₹1,524.60 crore at ₹33 per share, representing a 14% discount to the stock’s closing price on Monday. The issue was to be made to Reliance Infrastructure Ltd (promoter) and non-promoter entities like Authum Investment and Sanatan Financial Advisory.

Finally, in the much-anticipated October 3 meeting, the company announced it would issue ₹4,200 crore worth of Foreign Currency Convertible Bonds (FCCBs) to affiliates of Varde Investment Partners via private placement.