Reliance Power Ltd Sees Heavy Volume Amid Continued Downtrend and Weak Investor Sentiment

Trading Volume and Price Action Analysis

On 12 Jan 2026, Reliance Power recorded a total traded volume of 15,571,648 shares, translating to a traded value of approximately ₹5,168.23 lakhs. This volume is significantly higher than the stock’s average daily turnover, highlighting heightened market interest. However, the price action was decidedly negative, with the stock opening and hitting a day high of ₹33.88 before sliding to an intraday low of ₹32.63, a decline of 3.69% from the previous close of ₹33.88. The last traded price (LTP) stood at ₹32.74 as of 11:33:59 IST, reflecting a 3.10% drop on the day.

The weighted average price for the day was closer to the lower end of the range, indicating that the bulk of the volume was executed near the day’s lows. This suggests that sellers dominated the session, absorbing any buying interest and pushing prices lower.

Technical and Trend Indicators

Reliance Power’s technical indicators remain weak. The stock is trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — underscoring a sustained bearish trend. The stock has also been on a six-day losing streak, cumulatively shedding 8.6% in value during this period. This persistent decline is a clear indication of negative momentum and weak investor confidence.

Moreover, the stock is trading close to its 52-week low of ₹31.27, currently just 4.78% above this level. Such proximity to the annual low often acts as a psychological barrier, and a breach could trigger further selling pressure.

Investor Participation and Liquidity

Investor participation appears to be waning. Delivery volume on 9 Jan 2026 was 89.75 lakh shares but has since fallen by 14.21% compared to the five-day average delivery volume. This decline in delivery volume suggests that fewer investors are holding the stock for the long term, with more opting for short-term trading or exiting positions altogether.

Despite this, the stock remains sufficiently liquid for sizeable trades, with a liquidity measure based on 2% of the five-day average traded value allowing for trade sizes up to ₹1.77 crore without significant market impact. This liquidity ensures that institutional investors can still transact in the stock, although the prevailing trend indicates they may be reducing exposure.

Fundamental and Market Context

Reliance Power operates in the power sector, classified as a small-cap company with a market capitalisation of approximately ₹13,718 crore. The company’s Mojo Score currently stands at 34.0, with a Mojo Grade of Sell, upgraded from a previous Strong Sell rating on 3 Nov 2025. This upgrade reflects a slight improvement in outlook but remains firmly negative, signalling caution for investors.

On the broader market front, Reliance Power underperformed its sector by 2.01% and the Sensex by 2.67% on the day, with the sector down 1.04% and the Sensex declining 0.78%. This relative underperformance highlights company-specific challenges amid a generally weak market environment.

Accumulation vs Distribution Signals

The combination of heavy volume and falling prices typically signals distribution rather than accumulation. In Reliance Power’s case, the volume surge accompanied by a price decline and weighted average price near the day’s low suggests that institutional and retail investors are offloading shares rather than accumulating positions.

Additionally, the declining delivery volumes reinforce this interpretation, indicating that fewer investors are willing to hold the stock overnight. This pattern is often a precursor to further downside, especially when the stock is trading below all major moving averages and near its 52-week low.

Sector and Peer Comparison

Within the power sector, Reliance Power’s performance has been notably weaker than many peers, which have managed to hold steadier amid recent market volatility. The sector’s 1-day return of -1.04% contrasts with Reliance Power’s 3.45% decline, underscoring company-specific headwinds.

Investors should consider this relative weakness when evaluating their portfolio exposure to the power sector, as Reliance Power’s small-cap status and liquidity profile may expose it to sharper price swings compared to larger, more diversified power companies.

Outlook and Investor Considerations

Given the current technical weakness, declining investor participation, and sustained distribution signals, Reliance Power’s near-term outlook remains challenging. Investors should exercise caution and closely monitor key support levels, particularly the 52-week low at ₹31.27. A decisive break below this level could accelerate selling pressure and lead to further losses.

Conversely, any sustained recovery above short-term moving averages and an increase in delivery volumes could signal a potential turnaround, but such a scenario appears unlikely in the immediate term given prevailing market dynamics.

For investors seeking exposure to the power sector, it may be prudent to consider more stable or fundamentally stronger companies until Reliance Power demonstrates clear signs of technical and fundamental improvement.

Summary

Reliance Power Ltd’s stock has attracted significant trading volume, yet the price action and technical indicators point to ongoing weakness and distribution. The stock’s underperformance relative to its sector and the broader market, combined with falling delivery volumes and proximity to its 52-week low, suggest that investor sentiment remains subdued. While the recent Mojo Grade upgrade from Strong Sell to Sell indicates a marginally less negative outlook, the overall picture remains bearish. Investors should remain vigilant and consider alternative opportunities within the power sector or broader market.

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