WELCORP - Technical Analysis with Chart Patterns & Indicators

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

Technical Rating: 3.1

📊 Chart & Trend Analysis:

WELCORP is trading at ₹783, below both its 50 DMA (₹851) and 200 DMA (₹841), indicating a bearish structure. RSI at 30.6 is oversold, hinting at potential rebound, but MACD at -24.5 confirms strong bearish momentum. Bollinger Bands likely place price near the lower band, signaling downside exhaustion rather than a clear reversal. Current volume (4,19,084) is below the 1-week average (4,60,188), reflecting reduced participation and weak buying interest.

🔎 Momentum Signals:

- Short-term momentum: Bearish with oversold signals emerging.

- Support levels: ₹770 (near-term), ₹750, ₹664 (major support).

- Resistance levels: ₹800, ₹830–851 (50 DMA supply zone), ₹880.

- Optimal entry zone: ₹760–785 (only if RSI stabilizes and selling eases).

- Optimal exit zone: ₹820–880.

- Current phase: Downtrend with potential for a short-term bounce from oversold.

Positive

• Efficiency: ROCE 18.2% and ROE 13.5% indicate solid capital use.
• Earnings: EPS ₹47.2 and PAT growth (₹214 Cr → ₹231 Cr) support profitability.
• Balance sheet: Debt-to-equity 0.21 is moderate.
• Income: Dividend yield 0.64% offers some return.

Limitation

• Valuation: P/E 27.4 above industry 20.6 suggests premium pricing.
• Trend: Price below 50/200 DMA confirms bearish setup.
• Growth vs price: PEG 10.9 indicates valuation not supported by growth.
• Momentum: Oversold RSI and negative MACD show persistent weakness.
• Participation: Volume below average limits rebound strength.

Company Negative News

• Flows: FII holding decreased by -0.34%.
• Performance: 52-week index 35.9% shows underperformance vs leaders.

Company Positive News

• Results: PAT increased (₹214 Cr → ₹231 Cr); Qtr profit variation 114% indicates strong YoY momentum.
• Sentiment: DII holding increased by 0.17%, adding domestic support.

Industry

• Relative valuation: Industry P/E 20.6 is lower than WELCORP’s, implying peers may be cheaper.
• Backdrop: Demand in infrastructure and energy pipelines supports medium-term sector outlook.

Conclusion

⚠️ WELCORP is in a downtrend with oversold conditions that could spark a technical bounce. Consider entries near ₹760–785 only if selling pressure cools; look to book profits around ₹820–880. While fundamentals show decent efficiency and earnings, elevated valuation and weak momentum warrant caution. Short-term bias is sideways-to-down with rebound potential from support.