Asian Paints Ltd. Technical Momentum Shifts to Bullish Amid Mixed Returns

Technical Trend Overview

Recent analysis reveals that Asian Paints’ technical trend has upgraded from mildly bullish to bullish, reflecting stronger momentum across multiple timeframes. The daily moving averages are firmly bullish, supporting the stock’s current price level of ₹2,763.75, which is slightly above the previous close of ₹2,756.35. The stock’s intraday range on 1 Jan 2026 spanned from ₹2,758.10 to ₹2,796.25, indicating some volatility but overall upward bias.

On the weekly chart, the Moving Average Convergence Divergence (MACD) indicator is bullish, signalling positive momentum, while the monthly MACD remains mildly bullish, suggesting a gradual strengthening of the longer-term trend. The Relative Strength Index (RSI) on both weekly and monthly charts currently shows no clear signal, hovering in neutral territory, which implies the stock is neither overbought nor oversold at this juncture.

Price Momentum and Volatility Indicators

Bollinger Bands on the weekly timeframe have turned bullish, reflecting increased price volatility accompanied by upward price movement. The monthly Bollinger Bands remain mildly bullish, consistent with a steady but cautious longer-term outlook. The KST (Know Sure Thing) oscillator, a momentum indicator, is bullish on the weekly scale and mildly bullish monthly, reinforcing the positive momentum narrative.

However, the Dow Theory presents a mixed picture: mildly bearish on the weekly timeframe but mildly bullish monthly. This divergence suggests some short-term caution amid a generally positive longer-term trend. The On-Balance Volume (OBV) indicator is mildly bullish on both weekly and monthly charts, indicating that volume trends are supporting the price advances, albeit modestly.

Comparative Performance Against Sensex

Asian Paints’ recent returns show a complex pattern when compared with the Sensex benchmark. Over the past week, the stock declined by 0.78%, underperforming the Sensex’s 0.22% drop. The one-month return also lagged, with Asian Paints down 3.52% versus a 0.49% decline in the Sensex. However, year-to-date and one-year returns are robust at 21.11%, significantly outperforming the Sensex’s 9.06% gain over the same periods.

Longer-term returns paint a more challenging picture. Over three years, Asian Paints has declined by 10.61%, while the Sensex surged 40.07%. The five-year return is essentially flat for Asian Paints (-0.03%) compared to a strong 78.47% gain for the Sensex. Over a decade, both have delivered exceptional returns, with Asian Paints up 212.69% and the Sensex slightly ahead at 226.30%.

Moving Averages and Daily Price Action

The daily moving averages for Asian Paints are firmly bullish, with the stock price consistently trading above its short-term and medium-term averages. This alignment supports the recent positive momentum and suggests that the stock may continue to find buying interest near current levels. The 52-week high of ₹2,985.50 remains a key resistance level, while the 52-week low of ₹2,125.00 provides a significant support base.

Today's modest gain of 0.27% reflects cautious optimism among investors, who appear to be digesting the mixed signals from weekly and monthly indicators. The absence of a strong RSI signal on weekly and monthly charts indicates that the stock is not yet in an overextended position, leaving room for further upside if bullish momentum sustains.

Technical Ratings and Market Sentiment

MarketsMOJO’s latest assessment downgraded Asian Paints from a Buy to a Hold rating on 30 Dec 2025, reflecting the nuanced technical picture. The Mojo Score currently stands at 67.0, with a Mojo Grade of Hold, signalling moderate confidence in the stock’s near-term prospects. The Market Cap Grade remains at 1, indicating the company’s large-cap status but also suggesting limited upside from a market capitalisation perspective.

Investors should note that while the technical trend has improved to bullish, the mixed signals from Dow Theory and the neutral RSI readings warrant a cautious approach. The mildly bullish OBV readings suggest that volume is supporting price gains, but not with overwhelming conviction.

Outlook and Investor Considerations

Asian Paints’ technical momentum shift to bullish is a positive development, particularly given the stock’s strong year-to-date and one-year returns. However, the underperformance relative to the Sensex over shorter and medium-term periods highlights the importance of monitoring broader market conditions and sector-specific dynamics.

Investors should weigh the bullish signals from MACD, moving averages, and Bollinger Bands against the neutral RSI and mixed Dow Theory readings. The stock’s ability to sustain above key moving averages and break through resistance near ₹2,985.50 will be critical for confirming a sustained uptrend.

Given the current Hold rating and moderate Mojo Score, a balanced approach is advisable. Investors seeking exposure to the paints sector may consider Asian Paints as part of a diversified portfolio but should remain alert to technical developments and market sentiment shifts.

Summary

In summary, Asian Paints Ltd. is exhibiting a technical momentum upgrade with bullish signals across several key indicators, including MACD and moving averages. While volume trends and volatility measures support this positive outlook, neutral RSI and mixed Dow Theory signals counsel prudence. The stock’s recent price action and comparative returns suggest potential for further gains, but investors should remain vigilant to evolving market conditions.

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