CG Power Declines 8.54%: 5 Key Factors Behind the Sharp Weekly Drop

5 January: Weak Start Amid Broader Market Decline

CG Power & Industrial Solutions Ltd opened the week at Rs.645.30, down 0.93% from the previous Friday’s close of Rs.651.35. The stock’s decline was in line with the Sensex’s 0.18% fall to 37,730.95, reflecting cautious investor sentiment amid subdued market conditions. Trading volume was moderate at 103,406 shares, indicating steady but uninspired participation.

6 January: Continued Downtrend with Rising Volume

The downward momentum intensified on 6 January as the stock fell 1.15% to Rs.637.85, underperforming the Sensex’s 0.19% decline to 37,657.70. Volume increased to 109,453 shares, signalling growing selling pressure. The stock’s performance diverged further from the benchmark, highlighting company-specific challenges amid a cautious market backdrop.

7 January: Minor Decline and Reduced Volume

On 7 January, CG Power’s price slipped marginally by 0.16% to Rs.636.80, with volume dropping to 72,460 shares. The Sensex bucked the trend slightly, gaining 0.03% to 37,669.63. The stock’s relative weakness persisted, with technical indicators remaining bearish as it traded below key moving averages.

8 January: Intraday Volatility Amid Mixed Signals

The stock experienced significant intraday swings on 8 January, hitting a high of Rs.660.95 (+3.79%) and a low of Rs.594 (-6.72%). Despite the intraday rally, CG Power closed down 3.79% at Rs.612.65, underperforming the Sensex’s 1.41% decline to 37,137.33 and the heavy electrical equipment sector’s 2.14% fall. This volatility reflected a tug-of-war between short-term buying interest, evidenced by a surge in call option activity, and sustained selling pressure.

Notably, call option volumes surged with 6,366 contracts traded at the ₹650 strike and 4,716 at ₹660, signalling cautious optimism among derivatives traders. However, delivery volumes declined sharply by 55.26% compared to the five-day average, suggesting reduced long-term investor conviction. The stock remained below all major moving averages, indicating persistent technical resistance.

9 January: Bearish Momentum Intensifies with Death Cross Formation

CG Power’s downtrend extended into 9 January, closing at Rs.595.75 after a 2.76% drop and touching an intraday low of Rs.586.45 (-4.28%). This marked the fifth consecutive day of losses, cumulatively eroding 8.81% of value. The stock underperformed both the Sensex (-0.89%) and its sector (-2.25%), reflecting intensified selling pressure.

Technical analysis revealed the formation of a Death Cross, where the 50-day moving average crossed below the 200-day moving average, signalling a bearish trend shift. Additional momentum indicators such as the weekly MACD and Bollinger Bands confirmed weakening momentum. The stock’s elevated P/E ratio of 87.81, well above the industry average of 37.18, further raised valuation concerns amid deteriorating fundamentals.

Derivatives Activity Highlights Mixed Market Sentiment

The derivatives market activity during the week underscored the mixed sentiment surrounding CG Power. On 8 January, call option volumes surged at strike prices near the current market level, indicating speculative bullish bets despite the stock’s recent decline. Open interest rose by 29.16% to 38,040 contracts, with a combined futures and options value exceeding ₹67,987 lakhs, reflecting heightened trading interest.

Conversely, on 9 January, put option activity intensified with 4,032 contracts traded at the ₹590 strike and 4,354 at ₹600, signalling increased bearish positioning and hedging. The turnover for these strikes was substantial, amounting to ₹555.55 lakhs and ₹733.52 lakhs respectively. This surge in put options aligns with the stock’s technical weakness and ongoing price pressure.

Delivery volumes surged to 43.7 lakh shares on 8 January, a 243.98% increase over the five-day average, suggesting active repositioning by institutional investors amid the volatile price action. Despite this, the stock’s liquidity remained adequate to support sizeable trades without excessive market impact.

Weekly Price Performance Comparison

Key Takeaways

• Significant Underperformance: CG Power declined 8.54% over the week, sharply underperforming the Sensex’s 2.62% fall, reflecting company-specific pressures.


• Technical Weakness: The formation of a Death Cross and trading below all major moving averages signal a bearish trend and potential for further downside.


• Volatile Intraday Moves: The stock exhibited wide intraday swings on 8 January, indicating uncertainty and mixed investor sentiment.


• Derivatives Market Activity: Elevated call and put option volumes suggest conflicting views, with cautious optimism offset by growing bearish hedging.


• Institutional Repositioning: Surging delivery volumes amid falling prices point to active repositioning by institutional investors, possibly reducing exposure or hedging risk.

Conclusion

The week ending 9 January 2026 was challenging for CG Power & Industrial Solutions Ltd, marked by sustained price declines, technical deterioration, and mixed market signals. Despite brief intraday rallies and increased call option activity, the stock’s overall trend remained negative, culminating in a bearish Death Cross formation and a five-day losing streak. The heavy put option volumes and rising delivery volumes suggest growing caution among investors and traders. While the company’s long-term track record remains strong, the current environment calls for prudence as the stock navigates sectoral headwinds and technical resistance. Monitoring upcoming market developments and technical indicators will be crucial for assessing any potential reversal or further downside risk in the near term.

Upgrade at special rates, valid only for the next few days. Claim Your Special Rate →