NHPC Ltd Faces Bearish Momentum Amid Technical Indicator Shifts

Technical Trend Overview

Recent technical assessments reveal that NHPC Ltd’s overall trend has deteriorated from mildly bearish to outright bearish. The daily moving averages have turned decisively bearish, signalling increased selling pressure in the short term. Meanwhile, the weekly and monthly charts present a more nuanced picture: the MACD indicator is mildly bullish on a weekly basis but mildly bearish monthly, suggesting some short-term attempts at recovery amid longer-term weakness.

The Relative Strength Index (RSI) remains neutral on both weekly and monthly timeframes, indicating no clear momentum extremes such as overbought or oversold conditions. However, the Bollinger Bands are firmly bearish across weekly and monthly charts, reflecting sustained downward price volatility and pressure near the lower band.

Price Movement and Volatility

NHPC’s current share price stands at ₹77.61, down 2.23% from the previous close of ₹79.38. The stock traded within a range of ₹77.21 to ₹79.19 today, remaining below its 52-week high of ₹92.30 but comfortably above the 52-week low of ₹71.01. This price action suggests the stock is under pressure but has not yet approached critical support levels.

On a relative basis, NHPC has underperformed the Sensex over the past week, with a stock return of -4.73% compared to the benchmark’s -1.73%. However, over the one-month horizon, NHPC has outperformed the Sensex, gaining 1.37% while the Sensex declined by 3.24%. Year-to-date and one-year returns remain negative for NHPC, at -1.96% and -2.96% respectively, contrasting with the Sensex’s positive 6.63% return over the same one-year period.

Momentum Indicators and Volume Analysis

The Moving Average Convergence Divergence (MACD) indicator presents a split signal: weekly readings are mildly bullish, hinting at some short-term upward momentum, but monthly readings remain mildly bearish, reflecting longer-term downward pressure. This divergence suggests that while short-term traders may find some buying opportunities, the broader trend remains cautious.

The KST (Know Sure Thing) indicator aligns with this view, showing bearish momentum on the weekly chart and mildly bearish on the monthly chart. This supports the notion of a weakening trend that may require confirmation before a sustained reversal.

On-Balance Volume (OBV) data is similarly mixed, with weekly readings mildly bullish, indicating some accumulation, but monthly readings mildly bearish, signalling distribution over a longer timeframe. This volume pattern reinforces the technical uncertainty surrounding NHPC’s near-term direction.

Moving Averages and Bollinger Bands

The daily moving averages have turned bearish, with the short-term averages crossing below longer-term averages, a classic sell signal. This crossover indicates that recent price declines have gained momentum and that the stock may face further downside pressure in the near term.

Bollinger Bands on both weekly and monthly charts are bearish, with the price frequently touching or moving below the lower band. This suggests heightened volatility and a persistent downtrend, which may deter risk-averse investors. The widening of the bands also indicates increasing price fluctuations, which could lead to sharper moves either way but currently favours the bears.

Dow Theory and Broader Market Context

According to Dow Theory, NHPC’s weekly and monthly trends are mildly bearish, confirming the technical indicators’ signals of a weakening trend. This theory, which emphasises confirmation between market averages and volume, suggests that the stock is unlikely to see a sustained rally without a significant change in market sentiment or fundamentals.

Despite these technical headwinds, NHPC’s long-term performance remains robust. Over the past five and ten years, the stock has delivered returns of 215.49% and 312.82% respectively, significantly outperforming the Sensex’s 65.05% and 241.54% returns over the same periods. This long-term strength may provide some comfort to investors considering the current technical weakness as a potential buying opportunity on dips.

Mojo Score and Analyst Ratings

NHPC’s current Mojo Score stands at 30.0, reflecting a Sell rating, downgraded from Hold on 11 Nov 2025. The Market Cap Grade is 2, indicating a relatively modest market capitalisation compared to larger peers in the power sector. This downgrade aligns with the deteriorating technical indicators and suggests caution for investors looking to initiate or add to positions at current levels.

The downgrade from Hold to Sell signals that analysts and algorithmic models have recognised the shift in momentum and increased downside risk. Investors should weigh this against the company’s fundamental outlook and sector dynamics before making portfolio decisions.

Investor Takeaways and Outlook

In summary, NHPC Ltd’s technical parameters have shifted towards a bearish posture, with key indicators such as moving averages, Bollinger Bands, and Dow Theory confirming increased downside risk. The mixed signals from momentum indicators like MACD and OBV suggest some short-term volatility and potential for minor rebounds, but the prevailing trend remains negative.

Investors should consider the stock’s recent underperformance relative to the Sensex and the downgrade in Mojo Grade when evaluating their positions. While NHPC’s long-term returns remain impressive, the current technical environment advises caution, particularly for short-term traders or those with low risk tolerance.

Monitoring upcoming price action around support levels near ₹71 and observing changes in volume and momentum indicators will be critical for anticipating any potential trend reversals. Until then, the bearish technical signals suggest that NHPC may continue to face headwinds amid broader market uncertainties.

Conclusion

NHPC Ltd’s recent technical deterioration highlights the importance of integrating multiple indicators to assess stock momentum comprehensively. The shift from mildly bearish to bearish across several key parameters underscores the need for vigilance among investors. While the stock’s long-term fundamentals and historical returns remain strong, the current technical landscape suggests a cautious approach is warranted in the near term.

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