SKFINDIA - Technical Analysis with Chart Patterns & Indicators

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

Technical Rating: 2.4

📊 Chart Patterns: SKFINDIA is trading well below its 50 DMA (1,986 ₹) and 200 DMA (2,098 ₹). Current price (1,740 ₹) is near its 52-week low (1,652 ₹), showing strong bearish momentum. The broader pattern indicates a breakdown with lower highs and lower lows, confirming a downtrend.

📈 Moving Averages: Price < 50 DMA and < 200 DMA → bearish alignment, signaling weakness in both short-term and long-term trends.

📉 RSI: 21.7 → deep oversold territory, suggesting potential technical rebound but overall weak momentum.

📉 MACD: -72.4 → strong bearish crossover, confirming heavy downward momentum.

📊 Bollinger Bands: Price hugging lower band, indicating oversold conditions but also risk of further downside.

📊 Volume Trends: Current volume (20,963) is significantly lower than 1-week average (51,800) → weak participation, showing lack of strong buying interest.

📍 Support Levels: 1,700 ₹, 1,652 ₹ (52-week low), and 1,600 ₹.

📍 Resistance Levels: 1,800 ₹, 1,986 ₹ (DMA 50), and 2,098 ₹ (DMA 200).

🔎 Trend: The stock is reversing downward with strong bearish signals. A breakdown below 1,700 ₹ could trigger further decline, while a rebound above 1,800–1,986 ₹ may signal short-term recovery momentum.

Positive

• 📊 EPS at 109 ₹ supports valuation strength.
• 📊 ROCE (28.8%) and ROE (21.4%) show excellent capital efficiency.
• 💰 Dividend yield of 0.80% provides modest income support for investors.
• 📊 Debt-free balance sheet (Debt-to-equity 0.00) adds financial stability.

Limitation

• ⚠️ Price trading near 52-week low (11.9% of range) → weak sentiment.
• ⚠️ RSI oversold and MACD strongly negative, limiting upside potential.
• ⚠️ PAT declined from 46.7 Cr. to 41.3 Cr. (–2.04%).
• ⚠️ FII holdings declined (–0.57%), showing reduced foreign investor confidence.

Company Negative News

• 📉 Quarterly profit decline highlights operational challenges.
• 📉 Weak technical indicators (MACD negative, RSI oversold).
• 📉 Stock trading near lower end of 52-week range.

Company Positive News

• 📈 Strong fundamentals with high ROCE and ROE.
• 📊 DII holdings increased (+0.40%), showing domestic investor support.
• 📊 Debt-free structure provides long-term resilience.

Industry

• 🏭 Engineering and industrial sector PE at 49.9, much higher than SKFINDIA’s PE (21.5), suggesting undervaluation relative to peers.
• 📊 Industry supported by manufacturing growth and infrastructure demand, though cyclical pressures remain.

Conclusion

🔎 SKFINDIA is showing strong bearish reversal signals with price below key moving averages, RSI oversold, and MACD negative. Optimal entry zone lies near 1,700–1,740 ₹ only for high-risk traders looking for technical rebound. Exit/resistance zone is 1,800–1,986 ₹. Long-term investors may find value in strong fundamentals and undervaluation relative to peers, but short-term traders should remain cautious until a clear breakout above 1,800–1,986 ₹ confirms recovery momentum.