Suzlon Energy share price continues to trade downwards, with the momentum threatening to breach the Rs 50 support. The stock’s likely continuation of the downward action is exacerbated by the formation of a bearish double-top pattern whose neckline is near the Rs 50 mark on the daily chart.
The Relative Strength Index (RSI) on the stock is at 39 as of this writing with the price below the 20, 50 and 100-day Exponential Moving Average (EMA) levels to affirm the prevailing bearish control. In addition, the Bollinger Bands are widening, signaling increased volatility. This set up raises the prospect of Suzlon Energy share price breaking below the psychological Rs 50 support.
On a positive note, the company has just revealed that it won a contract to build two 50 MW wind power plants for state-owned Bharat Petroleum Corporation Limited (BPCL). The contract is a valuable addition to Suzlon Energy’s strong order book and the two wind farms are scheduled to be completed in two years.
Nonetheless, the company’s stock will likely continue trading downwards as the broader market sentiment stays bearish. Energy stocks have generally been under pressure as investors take profit and expenditure on mega renewable energy projects slows down. The lower Bollinger Band on Suzlon share price is at 50.53 on the daily chart, and breaking below that level will strengthen the downward momentum.
Suzlon Energy Share Price Forecast
The momentum on Suzlon Energy share price signals that the downside will likely prevail as resistance persists at Rs 53.00. That will likely see the first support come at Rs 52.30. An extended control by the sellers will take the action lower, with the second support likely to be established at Rs 51.80.
On the other hand, breaking above Rs 53.00 will invite the buyers to take control. In that case, the action could go higher and encounter the first barrier at Rs 53.50. However, a stronger upward push will breach that mark and invalidate the downside narrative. In addition, the resulting momentum could send the stock price higher to test Rs 54.10.
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