ELECON - Technical Analysis with Chart Patterns & Indicators

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

Technical Rating: 2.8

📊 Technical Analysis

• Chart Patterns: Price (483 ₹) is below both 50 DMA (518 ₹) and 200 DMA (556 ₹), indicating weakness.
• Moving Averages: Bearish bias as price trades under short-term and long-term averages.
• RSI: 32.6 → oversold territory, suggesting potential for a technical rebound but trend remains weak.
• MACD: -15.0 → bearish crossover, confirming downward momentum.
• Bollinger Bands: Price near lower band, indicating oversold conditions and possible short-term bounce.
• Volume Trends: Current volume (1.24 Lakh) is below 1-week average (1.50 Lakh), showing weak participation.

📈 Momentum & Signals

• Short-term Momentum: Bearish bias with oversold RSI suggesting possible short-term bounce.
• Support Zones: 470 ₹ (near-term), 450 ₹ (strong support), 348 ₹ (52-week low).
• Resistance Zones: 518 ₹ (50 DMA), 556 ₹ (200 DMA), 600 ₹ (psychological resistance).
• Optimal Entry: 470–450 ₹ range if RSI dips closer to 30.
• Optimal Exit: 518–556 ₹ range unless breakout above 600 ₹.
• Trend Status: Stock is trending downward with oversold signals; possible consolidation near support levels.

✅ Positive

• Strong ROCE (29.1%) and ROE (22.6%) indicate efficient capital use.
• EPS of 23.8 ₹ supports valuation strength.
• DII holdings increased (+0.33%), showing domestic institutional confidence.
• PEG ratio (0.53) suggests favorable growth relative to valuation.

⚠️ Limitation

• Price trading below both 50 DMA and 200 DMA, showing weakness.
• Quarterly PAT declined from 107 Cr. to 78.9 Cr., showing earnings pressure.
• FII holdings decreased (-1.30%), showing reduced foreign investor confidence.

📉 Company Negative News

• PAT decline highlights margin pressures.
• Stock trading well below 52-week high (717 ₹), reflecting weak momentum.
• FII outflows indicate reduced foreign investor sentiment.

📈 Company Positive News

• DII holdings increased, balancing FII outflows.
• Quarterly profit variation (+17.6%) shows year-on-year improvement despite sequential decline.
• Low debt-to-equity ratio (0.12) supports financial stability.

🏭 Industry

• Industry PE at 43.9, higher than company PE (26.9), suggesting Elecon trades at a discount.
• Capital goods and engineering sector remains cyclical but benefits from infrastructure and industrial growth.

🔎 Conclusion

• Stock is in a downtrend with oversold RSI suggesting possible short-term bounce.
• Best entry near 470–450 ₹; exit near 518–556 ₹ unless breakout above 600 ₹.
• Long-term investors may find value as the stock trades at a discount to industry PE, but should monitor earnings pressure and FII outflows.