ARE&M - Technical Analysis with Chart Patterns & Indicators

Last Updated Time : 20 Dec 25, 03:54 pm

Technical Rating: 3.1

📊 Chart Patterns: ARE&M is trading below its 50 DMA (961 ₹) and 200 DMA (1,009 ₹), reflecting short-term weakness. Current price (926 ₹) is near support at 910–920 ₹, with stronger support at 805 ₹ and resistance around 961–1,009 ₹.

📈 Moving Averages: Price below both averages indicates bearish bias. Sustained move above 1,009 ₹ is required for reversal.

📉 RSI: At 36.4, RSI is near oversold territory, suggesting potential for a short-term bounce.

📉 MACD: Negative at -12.2, confirming bearish momentum and lack of strong upward signals.

📊 Bollinger Bands: Price is near the lower band, indicating oversold conditions and possible mean reversion.

📊 Volume Trends: Current volume (3,07,519) is higher than average weekly volume (2,28,878), showing increased activity near support zones.

📌 Momentum Signals: Short-term bounce possible from 910–926 ₹ support, but trend remains weak unless price sustains above 961–1,009 ₹.

🎯 Entry Zone: 910–926 ₹ (near support, oversold RSI).

🎯 Exit Zone: 961–1,009 ₹ (short-term resistance), extended resistance at 1,050–1,100 ₹.

🔎 Trend Status: Currently consolidating with bearish bias. Reversal requires breakout above 1,009 ₹.

Positive

• Strong ROCE (16.8%) and ROE (12.3%) indicate efficient capital use.
• Debt-to-equity ratio of 0.04 shows a healthy balance sheet.
• DII holdings increased (+2.24%), reflecting strong domestic institutional support.
• EPS of 53.3 ₹ supports earnings base.

Limitation

• Stock trading below both 50 DMA and 200 DMA.
• RSI near oversold levels indicates weak momentum.
• FII holdings decreased (-1.42%), showing reduced foreign investor confidence.
• Quarterly profit variation (-12.1%) reflects earnings pressure.

Company Negative News

• Quarterly PAT growth slowed, showing weaker momentum despite sequential improvement.
• Stock has lost value from its 52-week high (1,275 ₹ to 926 ₹).

Company Positive News

• Dividend yield of 1.15% adds shareholder value.
• Quarterly PAT improved sequentially (212 Cr. vs 194 Cr.).
• Strong domestic institutional support with DII holdings rising.

Industry

• Industry PE at 30.0 is higher than ARE&M’s P/E (21.0), suggesting relatively attractive valuation.
• Sector outlook remains positive with steady demand drivers in engineering and manufacturing.

Conclusion

⚖️ ARE&M is consolidating near support with weak momentum. Traders may consider entry around 910–926 ₹ with exit near 961–1,009 ₹. Long-term investors can hold for extended targets near 1,050–1,100 ₹, while monitoring RSI and MACD for reversal confirmation.