NEWGEN - Technical Analysis with Chart Patterns & Indicators

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

Html

Copy

Technical Rating: 4.1

Technical Analysis Summary

• Trend: Trending upward with bullish momentum
• Moving Averages: Price (₹977) is above DMA 50 (₹911) but slightly below DMA 200 (₹1,003), suggesting a potential breakout if sustained
• RSI (65.0): Bullish zone, nearing overbought territory
• MACD (18.3): Bullish crossover, indicating continued upward momentum
• Bollinger Bands: Price approaching upper band, suggesting strength with possible short-term resistance
• Volume: Below average (11.4L vs 60.2L), indicating cautious participation despite price strength

Entry & Exit Zones

• Support: ₹940 – ₹960 (recent base and near DMA 50)
• Resistance: ₹1,000 – ₹1,050 (DMA 200 and psychological barrier)
• Optimal Entry: ₹950 – ₹970 on pullback with MACD support
• Exit Zone: ₹1,030 – ₹1,050 if price struggles near resistance

Positive

• Strong ROCE (27.8%) and ROE (22.4%) indicate efficient capital use
• EPS of ₹22.0 and low debt-to-equity ratio (0.03)
• Quarterly PAT growth of 16.4% (₹76.7 Cr. vs ₹48.7 Cr.)
• Price rebounding from 52-week low with bullish technical signals

Limitation

• High P/E of 44.8 vs industry average of 29.4 suggests premium valuation
• PEG ratio of 1.97 indicates moderate overvaluation relative to growth
• FII holding declined by 1.52%, signaling reduced foreign investor confidence
• Volume below average, suggesting lack of strong conviction in the rally

Company Negative News

• Concerns over high valuation and potential margin pressures in competitive enterprise software space

Company Positive News

• Strong quarterly earnings and expanding digital transformation contracts
• Growing presence in international markets and government digital initiatives

Industry

• NEWGEN operates in the enterprise software and digital transformation solutions sector
• Peers include Tata Elxsi, Persistent Systems, and Intellect Design Arena

Conclusion

NEWGEN is currently trending upward with bullish technical indicators and improving fundamentals. While valuation remains elevated and volume is subdued, strong earnings momentum and sector tailwinds support a positive outlook. Traders may consider entry near ₹960 with targets around ₹1,050, watching RSI and MACD for signs of sustained momentum or exhaustion.