Reliance Power Ltd Sees Heavy Volume Amid Continued Downtrend and Strong Sell Rating

Trading Activity and Price Movement

On 6 Feb 2026, Reliance Power recorded a total traded volume of 7,552,019 shares, translating to a traded value of approximately ₹20.87 crores. The stock opened at ₹27.85, touched a high of ₹28.09 and a low of ₹27.40 before settling at ₹27.46 by 09:45 IST. This price represents a 2.31% decline from the previous close of ₹28.12. The intraday volatility was relatively contained, but the downward pressure was evident as the stock failed to sustain gains above the opening price.

Reliance Power’s performance has been notably weak over the past two sessions, with a cumulative loss of 5.04%. This consecutive fall signals sustained selling pressure, which is further reflected in the stock trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day. Such positioning typically indicates a bearish trend and diminished investor confidence.

Volume Analysis and Investor Participation

While the volume spike on 6 Feb is significant, it contrasts with a decline in delivery volume observed on 5 Feb, which fell by 25.36% to 1.88 crore shares compared to the 5-day average. This divergence suggests that although trading activity is high, actual investor participation in terms of holding shares may be waning. The elevated volume could be driven by short-term traders or speculative activity rather than genuine accumulation.

Liquidity remains adequate for sizeable trades, with the stock’s liquidity supporting trade sizes up to ₹5.71 crores based on 2% of the 5-day average traded value. This level of liquidity is important for institutional investors considering entry or exit, but the prevailing downtrend and negative sentiment may deter large-scale accumulation.

Fundamental and Market Context

Reliance Power operates within the power sector, a segment that has seen mixed performance amid fluctuating energy demand and regulatory challenges. The company’s market capitalisation stands at ₹11,360.96 crores, categorising it as a small-cap stock. Despite its size, the stock’s Mojo Score has deteriorated to 29.0, prompting MarketsMOJO to upgrade its rating from Sell to Strong Sell on 3 Nov 2025. This downgrade reflects concerns over the company’s financial health, operational outlook, and technical indicators.

The stock’s underperformance relative to the broader Sensex, which declined 0.41% on the same day, and its sector’s modest 0.30% fall, highlights company-specific challenges. Investors are likely factoring in these risks, contributing to the persistent selling pressure and subdued price action.

Technical Indicators and Accumulation/Distribution Signals

Reliance Power’s technical profile remains weak. The stock’s position below all major moving averages signals a bearish momentum that has persisted over several months. The 5-day moving average, often used to gauge short-term trends, is currently above the stock price, indicating recent selling pressure. Similarly, the 20-day and 50-day averages confirm a medium-term downtrend, while the 100-day and 200-day averages reflect a longer-term negative bias.

From an accumulation/distribution perspective, the declining delivery volume despite high traded volume suggests distribution rather than accumulation. Investors appear to be offloading shares rather than building positions, which aligns with the Strong Sell rating. This pattern is often a precursor to further price weakness unless offset by positive fundamental developments or sectoral tailwinds.

Sectoral and Peer Comparison

The power sector has been under pressure due to regulatory uncertainties, fluctuating fuel costs, and demand variability. Within this context, Reliance Power’s struggles are more pronounced compared to some peers that have managed to stabilise earnings or secure favourable contracts. The company’s small-cap status also exposes it to higher volatility and liquidity risks relative to larger, more diversified power companies.

Investors should weigh these factors carefully, especially given the stock’s recent rating downgrade and technical weakness. While the sector may offer opportunities, Reliance Power’s current profile suggests caution and a preference for alternatives with stronger fundamentals and technicals.

Outlook and Investor Considerations

Given the current data, Reliance Power’s outlook remains challenging. The combination of a Strong Sell rating, deteriorating Mojo Score, and persistent price weakness suggests limited near-term upside. Investors should monitor for any fundamental improvements such as contract wins, regulatory clarity, or operational efficiencies that could reverse the downtrend.

Meanwhile, the high volume trading activity may continue to reflect speculative interest or short-term trading rather than sustained accumulation. This dynamic increases volatility and risk for longer-term holders.

For those invested in the power sector, a thorough peer comparison and risk assessment are advisable. Reliance Power’s small-cap status and current technical signals warrant a cautious approach, with consideration given to more stable or fundamentally stronger alternatives.

Summary

Reliance Power Ltd’s stock has experienced significant trading volume on 6 Feb 2026, yet the price trend remains firmly negative. The downgrade to Strong Sell by MarketsMOJO and the stock’s position below all key moving averages highlight ongoing weakness. Declining delivery volumes amid high traded volumes point to distribution rather than accumulation, signalling investor caution. While liquidity remains sufficient for sizeable trades, the stock’s underperformance relative to its sector and the Sensex emphasises company-specific challenges. Investors should carefully evaluate the risks and consider peer alternatives before committing fresh capital.

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