NEWGEN - Technical Analysis with Chart Patterns & Indicators
Back to ListTechnical Rating: 3.4
| Stock Code | NEWGEN | Market Cap | 6,542 Cr. | Current Price | 460 ₹ | High / Low | 1,379 ₹ |
| Stock P/E | 21.4 | Book Value | 103 ₹ | Dividend Yield | 1.09 % | ROCE | 27.8 % |
| ROE | 22.4 % | Face Value | 10.0 ₹ | DMA 50 | 572 ₹ | DMA 200 | 802 ₹ |
| Chg in FII Hold | -0.28 % | Chg in DII Hold | 0.10 % | PAT Qtr | 79.8 Cr. | PAT Prev Qtr | 76.7 Cr. |
| RSI | 38.6 | MACD | -36.2 | Volume | 26,52,517 | Avg Vol 1Wk | 26,21,954 |
| Low price | 434 ₹ | High price | 1,379 ₹ | PEG Ratio | 0.94 | Debt to equity | 0.03 |
| 52w Index | 2.66 % | Qtr Profit Var | -4.72 % | EPS | 20.0 ₹ | Industry PE | 20.9 |
📉 Chart & Trend: NEWGEN is trading at ₹460, well below both 50 DMA (₹572) and 200 DMA (₹802), confirming a bearish setup. RSI at 38.6 shows weak momentum, nearing oversold territory. MACD at -36.2 indicates strong negative crossover. Bollinger Bands suggest price is near the lower band, reflecting weakness with potential for a short-term rebound.
📊 Volume: Current volume (26.5 L) is aligned with the 1-week average (26.2 L), showing steady participation but no strong buying interest.
📈 Momentum Signals: Short-term momentum remains negative. Support levels are seen at ₹445–₹455 and strong support at ₹434 (recent low). Resistance lies at ₹572 (50 DMA) and ₹600–₹650.
🎯 Entry Zone: ₹445–₹455 (risk-managed entry zone).
🚪 Exit Zone: ₹572–₹600 (profit-taking zone near resistance).
🔎 Trend Status: Bearish reversal. The stock is reversing from highs, struggling to regain momentum, and remains under pressure below key moving averages.
Positive
- Strong ROCE (27.8%) and ROE (22.4%) show efficient capital use.
- EPS at ₹20.0 reflects consistent earnings power.
- Debt-to-equity ratio of 0.03 indicates negligible leverage.
- DII holding increased by 0.10%, showing domestic institutional support.
Limitation
- Price trading below both 50 DMA and 200 DMA reflects technical weakness.
- RSI at 38.6 indicates weak momentum, nearing oversold territory.
- PEG ratio of 0.94 suggests growth is fairly priced but not aggressive.
Company Negative News
- PAT declined slightly from ₹76.7 Cr to ₹79.8 Cr, showing limited earnings momentum.
- FII holding reduced by -0.28%, reflecting weaker foreign investor sentiment.
Company Positive News
- Quarterly profit variation at -4.72% is modest, but EPS remains stable.
- DII inflows (+0.10%) show confidence in long-term fundamentals.
Industry
- Industry PE at 20.9 is aligned with NEWGEN’s P/E of 21.4, suggesting fair valuation relative to peers.
- IT software and digital transformation sector benefits from rising demand but faces cyclical risks tied to global spending and competition.
Conclusion
⚠️ NEWGEN is in a bearish reversal phase, trading below key moving averages with weak RSI and strong negative MACD. Fundamentals show strong efficiency, negligible debt, and fair valuation relative to peers, but declining profits, weak foreign investor sentiment, and technical weakness limit upside. Short-term traders may consider entries near ₹445–₹455 with exits around ₹572–₹600, while long-term investors should wait for earnings stability and stronger momentum before fresh accumulation.
Would you like me to extend this into a peer benchmarking overlay against other mid-cap IT software companies like Persistent Systems, Coforge, and Mphasis? That would highlight whether NEWGEN’s weakness is sector-driven or company-specific.