NEWGEN - Swing Trade Analysis with AI Signals

Last Updated Time : 05 Nov 25, 7:43 am

Swing Trade Rating: 4.0

📉 Optimal Entry Price: ₹940–₹960 (near RSI support and below 50 DMA)

📈 Exit Strategy (if holding): ₹1,050–₹1,100 (near 200 DMA and short-term resistance)

🔷 Positive

• 📈 ROCE (27.8%) and ROE (22.4%): Indicate strong operational and financial efficiency.
• 📈 MACD at 25.0: Suggests bullish momentum is building.
• 📈 Trading above 50 DMA: Reflects short-term technical strength.
• 📈 DII holding increased by 0.12%: Signals mild domestic institutional confidence.
• 📉 Debt-to-equity ratio of 0.03: Indicates a nearly debt-free balance sheet.

⚠️ Limitation

• 📉 High P/E of 44.5: Above industry average (29.7), suggesting overvaluation.
• 📉 PEG ratio of 1.96: Indicates valuation is stretched relative to growth.
• 📉 RSI at 62.1: Approaching overbought zone, signaling caution for fresh entry.
• 📉 FII holding dropped by 1.52%: Reflects reduced foreign investor sentiment.
• 📉 52w Index at 21.9%: Suggests limited upside before hitting resistance.

📉 Company Negative News

• 📉 Stock has corrected significantly from ₹1,799 to ₹972, reflecting profit booking and valuation reset.
• 📉 Analysts flagged concerns over high valuation and slowing momentum in enterprise software deals.

📈 Company Positive News

• 📈 Q2FY26 PAT rose from ₹48.7 Cr. to ₹76.7 Cr., showing strong sequential earnings growth.
• 📊 Management remains optimistic about cloud migration and digital transformation demand across BFSI and government sectors.

💻 Industry

• 🖥️ Operates in the enterprise software and digital automation sector, which benefits from rising tech adoption and cloud investments.
• 📈 Industry P/E of 29.7 suggests NEWGEN trades at a premium, reflecting its niche positioning and growth visibility.

🧾 Conclusion

• ✅ NEWGEN is a strong swing trade candidate with solid fundamentals and improving technicals, though valuation and RSI levels warrant caution.
• 📌 Entry near ₹940–₹960 offers a favorable setup if RSI stabilizes and MACD sustains.
• 🚪 If already holding, consider exiting near ₹1,050–₹1,100, aligning with resistance and 200 DMA.

I can also chart NEWGEN’s RSI and MACD trends to help you time your entry more precisely.