NEWGEN - Technical Analysis with Chart Patterns & Indicators

Last Updated Time : 20 Dec 25, 03:55 pm

Technical Rating: 3.1

📊 Chart Patterns: NEWGEN is trading at 830 ₹, below both its 50 DMA (892 ₹) and 200 DMA (973 ₹). The chart shows weakness after a steep correction from the 52-week high (1,799 ₹), with support visible near 800 ₹.

📈 Moving Averages: Price is below short- and long-term averages, confirming bearish sentiment. Sustaining above 892–973 ₹ is crucial for recovery.

📉 RSI: At 36.3, RSI is weak and close to oversold territory, suggesting limited downside but no strong rebound yet.

📉 MACD: Negative (-19.9), showing bearish crossover and continuation of weakness.

📊 Bollinger Bands: Price is near the lower band, indicating selling pressure and possible sideways consolidation.

📊 Volume Trends: Current volume (1.39 lakh) is below average weekly volume (2.14 lakh), showing reduced participation and lack of strong buying interest.

📍 Momentum Signals: Short-term momentum is bearish. RSI suggests possible consolidation near support but no strong reversal yet.

🎯 Entry Zone: 810–830 ₹ (near support). Suitable for accumulation with risk management.

🎯 Exit Zone: 880–900 ₹ (near 50 DMA resistance). Strong resistance at 973 ₹ (200 DMA).

🔎 Trend Status: The stock is consolidating after a correction, with sideways movement expected near support levels.

Positive

• Strong ROCE (27.8%) and ROE (22.4%) indicate efficient capital use.
• Debt-to-equity ratio is very low (0.03), ensuring financial stability.
• Quarterly PAT improved (76.7 Cr. vs 48.7 Cr.), showing growth (+16.4%).
• DII holdings increased (+0.12%), showing domestic investor confidence.

Limitation

• High P/E (38.1) compared to industry average (26.4), indicating premium valuation.
• PEG ratio (1.68) suggests limited growth prospects relative to valuation.
• MACD strongly negative, showing short-term weakness.
• Volume participation below average.

Company Negative News

• FII holdings declined (-1.52%).
• Stock corrected sharply from 1,799 ₹ to 830 ₹.

Company Positive News

• Quarterly PAT grew (+16.4%).
• DII holdings increased (+0.12%).
• Debt-free balance sheet strengthens investor confidence.

Industry

• Industry PE is 26.4, lower than NEWGEN’s 38.1, highlighting premium valuation.
• Technology sector remains growth-oriented, supported by demand for digital transformation and enterprise solutions.

Conclusion

⚠️ NEWGEN is consolidating near support levels with weak technical momentum. Fundamentals show profitability and efficiency, but high valuation limits upside. Traders may consider entries near 810–830 ₹ with exits around 880–900 ₹. Long-term investors should wait for earnings growth to justify premium valuation before committing further.