Technical Momentum and Indicator Overview
Recent assessment changes reveal that Cholamandalam Investment & Finance Company’s technical trend has transitioned from mildly bullish to bullish. This shift is supported by several technical indicators across different time frames. The Moving Average Convergence Divergence (MACD) indicator, a widely used momentum oscillator, shows bullish signals on both weekly and monthly charts, suggesting sustained upward momentum in the stock’s price action.
Meanwhile, the Relative Strength Index (RSI) on weekly and monthly scales currently does not present a definitive signal, indicating that the stock is neither overbought nor oversold in these periods. This neutral RSI reading may imply that the stock has room to move in either direction, depending on forthcoming market developments.
Bollinger Bands, which measure volatility and potential price range, are mildly bullish on both weekly and monthly charts. This suggests that price fluctuations are contained within a relatively stable range, with a slight upward bias. Daily moving averages also align with a bullish stance, reinforcing the positive momentum observed in shorter time frames.
Additional Technical Signals
The Know Sure Thing (KST) indicator, another momentum oscillator, supports the bullish outlook on both weekly and monthly charts. However, Dow Theory and On-Balance Volume (OBV) indicators do not currently indicate a clear trend on weekly or monthly time frames. The absence of trend confirmation from these indicators suggests that while momentum is present, volume and broader market trend signals remain inconclusive.
Price action on 5 December 2025 shows Cholamandalam Investment & Finance Company trading at ₹1,676.80, with a day’s high of ₹1,697.25 and a low of ₹1,651.50. The previous close was ₹1,668.80, marking a day change of 0.48%. The stock remains below its 52-week high of ₹1,780.90 but well above the 52-week low of ₹1,167.60, indicating a relatively strong position within its annual trading range.
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Comparative Performance Against Sensex
When analysing Cholamandalam Investment & Finance Company’s returns relative to the Sensex, the stock exhibits a distinct performance pattern. Over the past week, the stock recorded a return of -2.79%, contrasting with the Sensex’s -0.53%. The one-month period shows a similar divergence, with the stock at -4.47% while the Sensex posted a 2.16% return.
However, longer-term returns reveal a different narrative. Year-to-date, Cholamandalam Investment & Finance Company’s return stands at 41.32%, significantly outpacing the Sensex’s 9.12%. Over one year, the stock’s return is 29.69%, compared to the Sensex’s 5.32%. Extending the horizon further, three-year returns for the stock reach 129.06%, while the Sensex’s return is 35.62%. Over five years, the stock’s return is 353.62%, markedly higher than the Sensex’s 89.14%. The ten-year return for Cholamandalam Investment & Finance Company is an impressive 1,231.96%, dwarfing the Sensex’s 232.57% over the same period.
These figures highlight the stock’s capacity for substantial long-term growth, despite short-term fluctuations and recent technical shifts.
Moving Averages and Price Action
Daily moving averages for Cholamandalam Investment & Finance Company currently indicate a bullish trend. This suggests that the stock’s short-term price movements are supported by positive momentum, which may encourage further interest from traders and investors focusing on technical signals.
The stock’s current price near ₹1,676.80 is approaching its 52-week high, which may act as a resistance level. Traders often watch such levels closely, as a breakthrough could signal further upward movement, while failure to surpass it might lead to consolidation or retracement.
Volume and Trend Confirmation
On-Balance Volume (OBV) does not currently indicate a clear trend, which suggests that volume patterns have not decisively confirmed the price momentum. Similarly, Dow Theory analysis shows no definitive trend on weekly or monthly time frames, indicating that broader market forces may not yet be fully aligned with the stock’s technical momentum.
These mixed signals highlight the importance of monitoring volume and trend confirmation alongside momentum indicators to gain a comprehensive understanding of the stock’s technical outlook.
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Outlook and Considerations for Investors
The recent revision in the company’s evaluation metrics, particularly the shift in technical trend from mildly bullish to bullish, suggests a renewed focus on momentum-driven trading strategies. Investors and market participants may find value in monitoring the interplay between momentum indicators such as MACD and KST, alongside moving averages, to gauge potential entry or exit points.
However, the neutral signals from RSI and the absence of trend confirmation from Dow Theory and OBV caution against relying solely on momentum indicators. The stock’s price remains within a defined range, and volume patterns have yet to decisively support the bullish momentum.
Given Cholamandalam Investment & Finance Company’s strong long-term returns relative to the Sensex, the stock continues to be a significant player in the NBFC sector. Nonetheless, short-term technical shifts and mixed indicator signals underscore the importance of a balanced approach that incorporates both technical and fundamental analysis.
Market participants should also consider broader sectoral trends and macroeconomic factors impacting NBFCs, as these can influence price momentum and technical indicator behaviour over time.
Summary
Cholamandalam Investment & Finance Company’s recent technical assessment reveals a shift towards bullish momentum, supported by MACD, KST, and moving averages, while RSI and volume-based indicators remain neutral. The stock’s price action near its 52-week high and its strong long-term returns relative to the Sensex highlight its market significance. Investors are advised to weigh these technical signals alongside broader market and sectoral factors to inform their investment decisions.
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