Suzlon Energy Shares Decline to a Two-Month Low: Eight Consecutive Days in Red

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Suzlon Energy Shares Decline to a Two-Month Low: Eight Consecutive Days in Red

Suzlon Energy Ltd., a major player in the wind energy sector, is seeing a rough trading stretch as its shares have plummeted for the eighth consecutive day

October 7th, 2024 News

Suzlon Energy Ltd., a major player in the wind energy sector, is seeing a rough trading stretch as its shares have plummeted for the eighth consecutive day, hitting a two-month low. The stock remained locked in a 5% lower circuit on Monday, October 7, as selling pressure persisted.

Key Points to Note:

Extended Decline:
- Suzlon's shares have dropped for nine out of the last ten trading sessions.
- The stock hit its highest level of ₹84.7 on September 16, but has since slid over 15%.
Technical Breakdown:
- On October 3, the stock breached its 50-Day Moving Average at ₹76.
- The decline has accelerated since, driven by a combination of technical weakness and profit-booking by investors.
Approaching Oversold Territory:
- Suzlon’s Relative Strength Index (RSI), a key technical indicator, now stands at 33, nearing "oversold" levels.
- An RSI below 30 typically signals that a stock is oversold, indicating potential for a rebound or continued bearishness.
Brokerage Downgrade:
- On September 27, brokerage firm Morgan Stanley downgraded Suzlon, citing the rapid price appreciation and concerns over valuations.
- Despite Suzlon's all-time high order book of around 5 GW, Morgan Stanley views the risk-reward as more balanced and is waiting to see stronger execution before becoming bullish again.
Market Sentiment Impact:
- Broader market weakness has contributed to Suzlon’s decline, as investors prefer to book profits following the stock’s earlier surge.
Price Level Watch:
- Suzlon's shares are currently trading at ₹70.98, a level not seen since August 7 this year.

Technical Analysis – Key Levels to Watch:

The continued slide below key technical levels and the impending oversold RSI suggest a crucial turning point for Suzlon’s stock price. If the RSI dips further below 30, investors might anticipate a short-term bounce or further declines, depending on broader market sentiment.

Looking Ahead:

Suzlon Energy has enjoyed a period of outperformance thanks to its strong order book and improved financials, but the recent downgrades and market pressure have dampened enthusiasm. Analysts now emphasize the need for better execution on existing orders to justify the stock’s previous run-up.

Investors are advised to keep a close eye on the ₹70 support level, as a break below this mark could trigger further selling, while a hold above it may indicate a potential consolidation phase.