Reliance Power Ltd Sees Heavy Volume Amid Price Decline and Bearish Signals

Trading Volume and Price Action Analysis

On 23 Jan 2026, Reliance Power recorded a total traded volume of 19,545,234 shares, translating to a traded value of approximately ₹57.37 crores. This volume is significantly higher than the stock's average daily volumes, signalling heightened investor interest or possibly increased speculative activity. The stock opened at ₹30.40, reached an intraday high of ₹30.40, but succumbed to selling pressure to close near its low at ₹28.89, down 3.60% from the previous close of ₹29.97.

The weighted average price for the day was closer to the lower end of the range, indicating that the bulk of trades occurred near the day's low. This price-volume combination often suggests distribution, where sellers dominate despite high volumes.

Technical Indicators and Moving Averages

Reliance Power is currently trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — underscoring a persistent bearish trend. The stock’s failure to hold above these technical benchmarks reflects weak investor sentiment and a lack of short-term buying interest.

Moreover, the stock hit a new 52-week low of ₹28.76 during the session, reinforcing the downtrend and raising concerns about further downside risks. The day’s low represented a 4.04% decline intraday, which is a notable underperformance compared to the Power sector’s 1.18% decline and the Sensex’s marginal 0.28% fall.

Investor Participation and Delivery Volumes

Interestingly, despite the high traded volume, delivery volumes have shown a marked decline. On 22 Jan 2026, the delivery volume stood at 1.15 crore shares, which is down by 35.3% compared to the 5-day average delivery volume. This divergence between traded volume and delivery volume suggests that a significant portion of the trading activity may be intraday or speculative in nature, rather than long-term accumulation.

Such a pattern often indicates that investors are reluctant to hold the stock overnight, possibly due to concerns over the company’s fundamentals or broader sectoral headwinds.

Fundamental and Market Capitalisation Context

Reliance Power operates within the Power industry and is classified as a small-cap stock with a market capitalisation of approximately ₹12,246 crores. Despite its sizeable market cap, the company’s Mojo Score stands at a low 34.0, with a Mojo Grade of Sell as of 3 Nov 2025, downgraded from a previous Strong Sell rating. This downgrade reflects deteriorating fundamentals or negative outlooks from the rating agency.

The stock’s underperformance relative to its sector and the broader market further emphasises the challenges it faces. The Power sector itself has been under pressure due to regulatory uncertainties, fluctuating fuel costs, and subdued demand growth, which have collectively weighed on companies like Reliance Power.

Liquidity and Trading Viability

From a liquidity perspective, Reliance Power remains sufficiently liquid for institutional and retail investors alike. Based on 2% of the 5-day average traded value, the stock can accommodate trade sizes of up to ₹3.11 crores without significant price impact. This liquidity ensures that investors can enter or exit positions with relative ease, although the prevailing negative sentiment may limit buying interest.

Accumulation vs Distribution Signals

The combination of high volume with a price decline and falling delivery volumes points towards distribution rather than accumulation. Typically, accumulation is characterised by rising prices on increasing volumes and strong delivery participation, signalling investor confidence and long-term buying. In contrast, Reliance Power’s current trading pattern suggests that large investors or traders may be offloading shares, possibly anticipating further weakness.

Such distribution phases often precede extended downtrends or consolidation periods, making it imperative for investors to exercise caution and closely monitor upcoming quarterly results and sector developments.

Outlook and Investor Considerations

Given the current technical and fundamental backdrop, Reliance Power appears to be under significant selling pressure with limited signs of near-term recovery. The downgrade in Mojo Grade to Sell and the persistent trading below all major moving averages reinforce the bearish outlook.

Investors should be wary of chasing the stock amid high volumes, as the price action suggests distribution rather than genuine accumulation. Those holding positions may consider tightening stop-loss levels or reducing exposure until clearer signs of a turnaround emerge.

Meanwhile, prospective buyers might wait for confirmation of a trend reversal, such as sustained trading above key moving averages or improved delivery volumes, before committing fresh capital.

Monitoring sectoral developments, regulatory announcements, and quarterly earnings will be crucial to reassessing the stock’s prospects in the coming months.

Summary

Reliance Power Ltd’s exceptional trading volume on 23 Jan 2026 highlights heightened market activity but coincides with a continued downtrend and distribution signals. The stock’s technical weakness, combined with a downgrade in fundamental ratings and falling delivery volumes, suggests caution for investors. While liquidity remains adequate, the prevailing negative sentiment and sectoral challenges limit near-term upside potential.

Investors are advised to closely monitor price action and fundamental updates before making significant investment decisions in Reliance Power.

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