Technical Momentum Shift Boosts Torrent Power Ltd. to Hold Rating

Technical Trend Reversal and Price Momentum

After a period of mild bearishness, Torrent Power’s technical trend has transitioned to mildly bullish on the weekly timeframe. The stock closed at ₹1,395.70 on 5 February 2026, up 1.88% from the previous close of ₹1,370.00. Intraday, it touched a high of ₹1,410.30 and a low of ₹1,364.70, demonstrating increased buying interest. Despite trading below its 52-week high of ₹1,640.00, the stock remains comfortably above its 52-week low of ₹1,188.00, reflecting resilience amid sector headwinds.

Price momentum indicators reveal a mixed but improving picture. The Moving Average Convergence Divergence (MACD) on the weekly chart is bullish, indicating upward momentum, while the monthly MACD remains mildly bearish, suggesting some caution over the longer term. The Relative Strength Index (RSI) shows no definitive signal on both weekly and monthly charts, implying the stock is neither overbought nor oversold, which could allow room for further price appreciation without immediate risk of correction.

Moving Averages and Bollinger Bands Analysis

Daily moving averages currently present a mildly bearish stance, signalling some short-term consolidation or profit-taking. However, the weekly Bollinger Bands are bullish, indicating that price volatility is expanding upwards, often a precursor to sustained rallies. Conversely, the monthly Bollinger Bands remain mildly bearish, reinforcing the need for investors to monitor longer-term trends carefully.

Additional momentum indicators such as the Know Sure Thing (KST) oscillator align with this mixed outlook. The weekly KST is bullish, supporting the recent positive price action, while the monthly KST remains mildly bearish, reflecting underlying sector uncertainties and macroeconomic factors impacting the power industry.

Volume and Dow Theory Signals

On-Balance Volume (OBV) readings are encouraging, showing bullish trends on both weekly and monthly charts. This suggests that volume is confirming price advances, a positive sign for sustained momentum. Dow Theory analysis further supports a mildly bullish weekly trend, though the monthly trend remains neutral, indicating that while short-term optimism is rising, longer-term confirmation is pending.

Comparative Performance and Market Context

Examining Torrent Power’s returns relative to the Sensex reveals a strong long-term outperformance. Over the past 10 years, Torrent Power has delivered a staggering 516.61% return compared to the Sensex’s 244.38%. Even over three and five-year horizons, the stock has outpaced the benchmark by wide margins, returning 215.23% and 334.53% respectively, versus Sensex returns of 37.76% and 65.60%. This robust historical performance underscores the company’s ability to generate shareholder value despite sector cyclicality.

Shorter-term returns are more nuanced. Year-to-date, Torrent Power has gained 6.84%, outperforming the Sensex’s decline of 1.65%. Over the past month, the stock’s return was marginally negative at -0.19%, but still better than the Sensex’s -2.27%. The one-year return of 3.26% trails the Sensex’s 6.66%, reflecting recent sector pressures and broader market volatility.

MarketsMOJO Grade Upgrade and Implications

Reflecting these technical and fundamental dynamics, MarketsMOJO upgraded Torrent Power’s Mojo Grade from Sell to Hold on 8 July 2025, assigning a current Mojo Score of 68.0. The Market Cap Grade remains low at 2, indicating mid-cap status with moderate liquidity and market presence. The Hold rating suggests that while the stock is no longer a sell candidate, investors should exercise caution and monitor developments closely before committing fresh capital.

Investors should note that the mildly bullish weekly technicals are tempered by mixed monthly signals, implying that the stock may experience intermittent volatility. The daily moving averages’ mildly bearish stance further supports a cautious approach, especially for short-term traders.

Sector and Industry Considerations

Operating within the power sector, Torrent Power faces challenges including regulatory changes, fluctuating fuel costs, and evolving demand patterns. However, the company’s diversified portfolio and strategic initiatives have helped it maintain steady cash flows and operational efficiency. The current technical momentum shift may reflect market recognition of these strengths amid a stabilising sector environment.

Investor Takeaway and Outlook

For investors, Torrent Power’s recent technical momentum shift offers a cautiously positive signal. The weekly bullish MACD, KST, and OBV indicators suggest that buying interest is gaining traction, potentially paving the way for a sustained rally. However, the absence of strong RSI signals and the mildly bearish monthly indicators counsel prudence.

Given the stock’s historical outperformance relative to the Sensex and its current technical upgrade, investors with a medium to long-term horizon may consider adding Torrent Power to a diversified portfolio, particularly if the power sector stabilises further. Short-term traders should watch for confirmation of trend strength through daily moving averages and volume patterns before increasing exposure.

Overall, Torrent Power Ltd. stands at a technical inflection point. The shift from a mildly bearish to mildly bullish weekly trend, combined with improving volume and momentum indicators, supports the recent upgrade to a Hold rating. Market participants should remain vigilant for evolving sector dynamics and broader market conditions that could influence the stock’s trajectory in the coming months.

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