Through January and August 2025, the Nifty 50 witnessed stable gains, with the broad market giving support from multiple sectors.
Nifty Energy was hammered through extended corrections and weak momentum, thus underperforming for most of said period. But now, Nifty Energy seems to be garnering strength. The index is trying to form a base and comes close to becoming an inverted head and shoulder pattern set for a bullish breakout. Within the energy stocks, two stocks stand out: JSW Energy and Tata Power, as stocks with cleaner setups often lead sector breakouts.
Tata Power: Bullish Reversal Breakout
Since the beginning of the correction, starting in September 2024 at ₹495, Tata Power share price declined almost 34 per cent in a span of six months. Since February 2025, the stock has been finding support on a rising trendline and consolidating between the ₹370–₹400 zone. During the course, it developed a higher-top-higher-bottom structure, which is one of the first signs of reversal. Tata Power, which is part of the Tata Group of companies, is once again trading above both its 100-day and 200-day moving averages, thus confirming the initiation of an upward trend. The RSI remains bullish and shows positive divergence as well, hinting at the potential upside momentum.
Key Tata Power’s Potential Signs of Reversal
- Multiple bullish patterns: Tata Power has formed an inverted head and shoulder and symmetric triangle pattern. Both patterns are on the verge of a breakout.
- 200 Day Moving Average: The very moment a stock starts trading above its 200DMA, a new uptrend is said to be in place.
- Breakout with Volume: At the breakout moment at the previous resistance volume, Tata Power’s volumes are seen significantly higher.
- RSI and Price Direction: The 14 period RSI is above 50 and indicates strong bullish momentum for the stock.
JSW Energy: Bullish Reversal Breakout
JSW Energy, which is part of the JSW group of companies, had corrected sharply from ₹805 to ₹418 during September 2024 to February 2025. Since then, the stock has seen a sharp rebound by 38% in one month to ₹580. After this rally, the stock entered into a tight consolidation zone. At present, it trades above all the important resistance levels as well as above its 100-day moving average, strong on its own. The RSI is holding above 50, indicating strong bullish momentum.
Jsw Energy’s Stock Reversal Analysis
- Breakouts of Consolidation Pattern: The price is getting ready to break this falling trend-line and rectangle pattern.
- Volume Explosion Confirming Breakout: Volume expanded along with price rise, which indicates strong investor interest.
- 100 DMA: Price is trading above its 100 DMA, which reflects an upward trend.
- RSI and Price Direction: The RSI for 14 periods is above 50, indicating that this stock is in very strong bullish momentum.
Final Take
Both Nifty and Nifty Energy are almost ready for bullish breakout formations – double bottom for Nifty and inverted head and shoulder for Nifty Energy. Being a high-beta sector, any broader market uptrend will likely accelerate gains in this sector. Tata Power and JSW Energy present strong setup technically within this space, boasting multiple bullish patterns, volume confirmations, and momentum indicators which suggest these stocks are potentially strongly positioned to outperform in the coming months.
Disclaimer
Note: The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.
Kiran Jani has over 15 years of experience as a trader and technical analyst in India’s financial markets. He is a well-known face on the business channels as Market Experts and has worked with Asit C Mehta, Kotak Commodities, and Axis Securities. Presently, he is Head of the Technical and Derivative Research Desk at Jainam Broking Limited.
Disclosure: The writer and his dependents do not hold the stocks discussed here. However, clients of Jainam Broking Limited may or may not own these securities.
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