Shares of Swan Energy Ltd took a significant hit on Tuesday, plunging 20 percent to touch an intraday low of Rs 534.70. The stock’s decline continued as it settled 18.82 percent lower at Rs 542.55. This sharp drop comes despite the stock witnessing a remarkable 100 percent surge over the past six months.
Analysts have been quick to identify concerning trends in Swan Energy’s stock performance, suggesting a bearish outlook based on technical indicators. AR Ramachandran from Tips2trades pointed out, “Swan Energy’s stock price has exhibited a bearish trend on daily charts, encountering strong resistance at Rs 676. A daily close below the support level of Rs 551 could potentially drive the stock towards a downside target of Rs 495 in the near term.”
Similarly, DRS Finvest founder Ravi Singh echoed concerns, stating, “The stock appears weak on daily charts and may slide towards the Rs 520 level, with resistance expected around the Rs 610 zone.”
Jigar S Patel, Senior Manager – Technical Research Analyst at Anand Rathi Shares and Stock Brokers, outlined potential trading ranges, noting, “Support is anticipated at Rs 525, with resistance at Rs 616. A decisive close above Rs 616 could trigger further upside momentum towards Rs 640. The expected trading range for the coming month lies between Rs 500 and Rs 640.”
Further exacerbating investor apprehensions, both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) have placed Swan Energy’s securities under the long-term Additional Surveillance Measure (ASM) framework. This move aims to caution investors about the heightened volatility surrounding the stock’s price movements.
Analyzing the stock’s performance against various moving averages and relative strength index (RSI), it’s evident that Swan Energy is currently trading below several short-term SMAs while hovering above long-term ones. The RSI, standing at 28.83, indicates an oversold condition, reflecting the prevailing bearish sentiment among investors.
Recent developments surrounding Swan Energy, including directives from the National Company Law Tribunal (NCLT) regarding its joint venture Triumph Offshore and prepayment of loans by its subsidiary Swan LNG Pvt Ltd, have further influenced market sentiments. Despite these efforts to strengthen its financial position, the company faces challenges amidst the broader market uncertainties.
With Swan Energy recently raising Rs 3,000 crore through a Qualified Institutions Placement (QIP), investors are closely monitoring how the company navigates through the current market turbulence and addresses concerns raised by analysts and regulatory bodies.
