Why is RTS Power Corpn. falling/rising?

Recent Price Movement and Market Context

The stock has been on a downward trajectory for the past two days, cumulatively losing 6.91% in returns. Intraday trading on 08-Dec saw RTS Power Corporation touch a low of ₹132, which is alarmingly close—just 1.52%—to its 52-week low of ₹130. This proximity to the annual low signals sustained selling pressure and a lack of immediate buying interest at these levels.

Adding to the bearish sentiment, the weighted average price indicates that a larger volume of shares traded near the day’s low, suggesting that sellers dominated the session. The stock’s liquidity remains adequate, with trading volumes sufficient to support sizeable transactions without excessive price impact, yet the prevailing trend remains negative.

Technical Indicators and Sector Performance

Technically, RTS Power Corporation is trading below all key moving averages—5-day, 20-day, 50-day, 100-day, and 200-day—highlighting a persistent bearish momentum. Such a pattern often discourages short-term and medium-term investors, as it signals weakness across multiple timeframes.

The broader Capital Goods sector, to which RTS Power belongs, also experienced a decline of 2.01% on the same day. While the sector’s fall is less severe than the stock’s 4.69% drop, it nonetheless reflects a challenging environment for companies in this space, possibly due to macroeconomic factors or sector-specific headwinds.

Comparative Performance Against Benchmarks

When analysing RTS Power Corporation’s returns relative to the Sensex, the stock’s underperformance becomes starkly evident. Over the past week, the stock declined by 5.38%, while the Sensex fell only 0.63%. The one-month picture is even more pronounced, with RTS Power down 8.97% against a 2.27% gain in the Sensex.

Year-to-date and one-year returns paint a similarly bleak picture, with the stock losing over 54% in both periods, whereas the Sensex has gained 8.91% and 4.15% respectively. This divergence suggests company-specific challenges or investor concerns that are not reflected in the broader market.

Despite these recent setbacks, the stock has delivered a robust five-year return of 291.11%, significantly outperforming the Sensex’s 86.59% gain over the same period. This long-term outperformance indicates that while the current phase is difficult, the company has demonstrated resilience and growth potential in the past.

Investor Participation and Volume Trends

Interestingly, investor participation has shown signs of rising interest, with delivery volumes on 05 Dec increasing by nearly 20% compared to the five-day average. This uptick in delivery volume could indicate that some investors are accumulating shares despite the downtrend, possibly anticipating a turnaround or valuing the stock at its depressed levels.

However, this increased participation has not yet translated into price support, as the stock continues to trade below critical moving averages and near its yearly lows.

Conclusion: Why RTS Power Corporation Shares Are Falling

The decline in RTS Power Corporation’s share price on 08-Dec is primarily driven by a continuation of a sustained downtrend, underperformance relative to the broader market and sector, and technical weakness across all major moving averages. The stock’s proximity to its 52-week low and the dominance of selling volume near intraday lows underscore the prevailing bearish sentiment.

While the Capital Goods sector’s modest decline contributes to the negative environment, RTS Power’s sharper fall suggests company-specific factors or investor concerns that have yet to be fully addressed. Despite increased delivery volumes indicating some investor interest, the stock remains under pressure, reflecting cautious sentiment amid challenging market conditions.

Investors should weigh these factors carefully, considering both the stock’s historical long-term outperformance and its current struggles before making investment decisions.

Get 2 full years of MojoOne Premium for only Rs. 12,999. Subscribe for 1 year and we'll add another year FREE. Offer valid for a limited time. Start Saving Now →