Key Events This Week
09 Feb: Intraday high surge to Rs.483.85 (+9.12%)
10 Feb: Technical momentum shifts to mildly bearish
12 Feb: Mojo Grade downgraded to Strong Sell amid weak financials
13 Feb: Bearish momentum confirmed, stock closes at Rs.434.45 (-2.26%)
09 February: Strong Intraday Surge Amid Market Optimism
Elecon Engineering began the week with a robust performance, surging 8.50% to close at Rs.479.85, significantly outperforming the Sensex’s 1.04% gain. The stock reached an intraday high of Rs.483.85, a 9.12% increase from the previous close, driven by heightened buying momentum and volatility. This rally marked two consecutive days of gains, accumulating a 10.48% return over the period, and positioned the stock above its short-term moving averages, signalling positive momentum. Despite this, the price remained below longer-term resistance levels, indicating room for further technical challenges.
10 February: Technical Momentum Shifts to Mildly Bearish
Following the strong start, the stock closed lower at Rs.467.95, down 2.48%, as technical indicators presented a more cautious outlook. The Moving Average Convergence Divergence (MACD) and Bollinger Bands suggested a shift from strongly bearish to mildly bearish momentum, while the Relative Strength Index (RSI) remained neutral. The stock traded within a wide intraday range of Rs.444.00 to Rs.491.05, reflecting investor uncertainty. Despite the pullback, Elecon’s weekly and monthly returns continued to outpace the Sensex, underscoring its relative strength amid mixed signals.
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12 February: Downgrade to Strong Sell Following Weak Financials
MarketsMOJO downgraded Elecon Engineering’s Mojo Grade from Sell to Strong Sell on 12 February, citing deteriorating technical indicators and disappointing quarterly financial results. The company reported a 33.1% decline in net profit after tax to Rs.71.99 crores and a subdued operating profit of Rs.109.18 crores. Return on Capital Employed (ROCE) fell to 23.67%, signalling reduced capital efficiency. Despite a respectable Return on Equity (ROE) of 17.89% and low debt-to-equity ratio of 0.02, the stock’s valuation remained expensive with a price-to-book ratio of 4.5 and a PEG ratio of 2.2, raising concerns about growth sustainability amid weakening fundamentals.
13 February: Bearish Momentum Confirmed as Stock Closes Lower
Elecon Engineering closed the week at Rs.434.45, down 2.26% on 13 February, confirming the bearish technical momentum. The stock traded between Rs.442.35 and Rs.462.95 during the session, reflecting persistent selling pressure. Technical indicators such as MACD and Know Sure Thing (KST) remained bearish on weekly charts, while Bollinger Bands suggested increased volatility with a downward bias. Although Dow Theory and On-Balance Volume (OBV) showed mild bullish signals weekly, these were insufficient to counteract the dominant negative trend. The stock’s performance over the past year remained weak, with a 4.74% decline contrasting the Sensex’s 9.85% gain, underscoring ongoing challenges.
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| Date | Stock Price | Day Change | Sensex | Day Change |
|---|---|---|---|---|
| 2026-02-09 | Rs.479.85 | +8.50% | 37,113.23 | +1.04% |
| 2026-02-10 | Rs.467.95 | -2.48% | 37,207.34 | +0.25% |
| 2026-02-11 | Rs.455.80 | -2.60% | 37,256.72 | +0.13% |
| 2026-02-12 | Rs.444.50 | -2.48% | 37,049.40 | -0.56% |
| 2026-02-13 | Rs.434.45 | -2.26% | 36,532.48 | -1.40% |
Key Takeaways
Positive Signals: Elecon Engineering demonstrated strong short-term momentum early in the week, with an intraday surge of 9.12% on 9 February and gains above short-term moving averages. The company’s long-term performance remains impressive, with five-year returns exceeding 1,700% and a conservative capital structure marked by a low debt-to-equity ratio of 0.02. Management efficiency, reflected in a 17.89% ROE, also remains a strength.
Cautionary Signals: The downgrade to Strong Sell on 12 February highlights deteriorating technical momentum and weak quarterly financial results, including a 33.1% drop in net profit and declining ROCE. Valuation metrics remain elevated, with a price-to-book ratio of 4.5 and PEG of 2.2, raising concerns about growth sustainability. Technical indicators such as MACD, KST, and moving averages have turned bearish, and the stock closed the week with a 1.76% loss despite outperforming the Sensex’s decline.
Conclusion
Elecon Engineering’s week was marked by a sharp initial rally followed by a steady decline amid worsening technical and fundamental conditions. While the stock showed resilience relative to the broader market, the downgrade to Strong Sell and disappointing financial results signal heightened risks. The technical landscape suggests continued downward pressure, with limited bullish confirmation from volume or momentum indicators. Investors should remain cautious and monitor key support levels and any signs of trend reversal before considering exposure to this stock.
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