Technical view: Indian Energy Exchange Limited

The stock of IEX was bullish today despite weakness persisting in the market.

IEX surged nearly 2%, hitting the day’s high at Rs 203.40 before receding a little. The stock, after hitting a swing high of Rs 251.50, witnessed a strong correction of about 20% in nearly a month. With this, it has plunged below all the key moving averages and is extremely bearish. From the last six trading sessions, the stock formed strong bearish candles and has failed to find a strong support. However, today the stock witnessed a strong technical bounce as we see some shorts being covered ahead of the weekend.

Whether it is a dead-cat bounce at a beginning of an uptrend is surely a question to ask. The technical parameters are extremely bearish but oversold. The 14-period daily RSI (31.13) is placed in the bearish zone. The On Balance Volume shows an improvement today but has a lot to cover. The MACD supports the bearish momentum while the directional movement indicator also has a similar view. Also, the KST and TSI indicators are bearish. However, the Elder Impulse System, after indicating a strong sell signal, has signalled a neutral view for the stock.

Considering the above factors, we can figure out that IEX has grossly underperformed against the broader market. It has plunged over 20% on a YTD basis. However, strong buying interest today can be an early sign of reversal. As per the technical chart, the rise above the 200-DMA level of Rs 220 shall be met with positivity. This can trigger the stock higher back to the level of Rs 250 and above. The scrip is oversold and thus, it can see buying interest as well as good short covering. Traders can include it in their watchlist and track further movement.

Indian Energy Exchange operates as a power exchange. It offers an online electricity trading platform for trading, clearing, and settlement operations.