Key Events This Week
Jan 19: Upgraded to Hold as technicals improve amid mixed financial trends
Jan 20: Technical momentum shifts amid mixed market signals
Jan 21: Technical momentum shifts amid bearish signals
Jan 22: Downgraded to Sell amid technical weakness and long-term growth concerns
Jan 23: Week closes at Rs.173.80 (-0.80%)
Monday, 19 January: Upgrade to Hold Boosts Sentiment Amid Mixed Financial Trends
Finolex Industries began the week trading at Rs.176.15, down 0.20% from the previous close, while the Sensex declined 0.49%. On this day, MarketsMOJO upgraded the stock’s rating from 'Sell' to 'Hold', citing improvements in technical indicators and a solid quarterly financial performance despite ongoing challenges in long-term growth. The company reported a strong second quarter with operating cash flow reaching ₹382.68 crores and profit before tax surging by 623.68% to ₹108.35 crores. Profit after tax also rose by 203.8% to ₹123.56 crores, signalling a near-term turnaround.
Technically, the stock showed signs of stabilisation with a shift from bearish to mildly bearish momentum. The Moving Average Convergence Divergence (MACD) remained bearish but the Relative Strength Index (RSI) was neutral, indicating no extreme conditions. The stock traded within a narrow range of Rs.174.80 to Rs.177.05, reflecting cautious optimism among investors.
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Tuesday, 20 January: Mixed Technical Signals Amid Market Volatility
The stock declined further to Rs.175.30, down 0.48%, while the Sensex fell sharply by 1.82%. Technical momentum showed a subtle shift with the overall trend moving from bearish to mildly bearish. The MACD remained bearish on weekly and monthly charts, while the RSI stayed neutral. Bollinger Bands suggested increased volatility near the lower price band, indicating potential for either reversal or continuation of the downtrend.
Volume indicators presented a mixed picture: On-Balance Volume (OBV) was mildly bullish weekly but bearish monthly, reflecting short-term accumulation amid longer-term selling pressure. Dow Theory readings echoed this duality with mildly bullish weekly and mildly bearish monthly signals. Despite the technical caution, Finolex outperformed the Sensex over short-term periods, gaining 1.44% over the past week compared to the Sensex’s marginal decline.
Wednesday, 21 January: Technical Momentum Turns Bearish as Price Declines
Finolex Industries slipped to Rs.174.05, a 0.71% decline, while the Sensex dropped 0.47%. The technical outlook deteriorated from mildly bearish to outright bearish. Daily moving averages turned bearish, signalling increased downward pressure. The MACD showed divergence with a mildly bullish weekly reading but bearish monthly momentum, indicating short-term support amid longer-term weakness.
The Relative Strength Index remained neutral, while Bollinger Bands and the Know Sure Thing (KST) indicator confirmed bearish momentum. Dow Theory and On-Balance Volume also reflected bearish trends, suggesting growing selling pressure. Despite these signals, the stock’s recent outperformance relative to the Sensex over weeks and months provided some counterbalance to the negative technical picture.
Thursday, 22 January: Downgrade to Sell Reflects Growing Technical Weakness
On 22 January, Finolex Industries was downgraded from 'Hold' to 'Sell' by MarketsMOJO, driven by worsening technical indicators and concerns over long-term growth. The stock rebounded slightly to Rs.175.20, up 0.66%, while the Sensex gained 0.76%. However, the technical grade shifted from mildly bearish to outright bearish, with the MACD bearish on monthly charts and daily moving averages confirming a downtrend.
Financially, the company’s strong quarterly results were overshadowed by a declining operating profit trend of -1.49% annually over five years and a high PEG ratio of 22.3, signalling valuation concerns. The price-to-book ratio of 1.8 indicated a discount relative to peers, but the stock’s long-term returns lagged the Sensex significantly. The downgrade underscored investor caution amid mixed signals and structural challenges.
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Friday, 23 January: Week Ends with Further Decline Amid Market Weakness
Finolex Industries closed the week at Rs.173.80, down 0.80% on the day and 1.53% for the week. The Sensex also declined sharply by 1.33% on Friday and 3.31% for the week. The stock’s volume was relatively low at 10,483 shares, reflecting subdued investor interest. Technical indicators remained bearish, with no clear signs of reversal as the stock hovered near the lower end of its 52-week range (₹144.05 to ₹238.00).
The week’s price action highlighted the stock’s relative resilience, as it outperformed the Sensex’s larger decline. However, the persistent bearish technical signals and the downgrade to 'Sell' suggest caution. Investors should monitor upcoming quarterly results and sector developments closely to assess any potential shifts in momentum.
| Date | Stock Price | Day Change | Sensex | Day Change |
|---|---|---|---|---|
| 2026-01-19 | Rs.176.15 | -0.20% | 36,650.97 | -0.49% |
| 2026-01-20 | Rs.175.30 | -0.48% | 35,984.65 | -1.82% |
| 2026-01-21 | Rs.174.05 | -0.71% | 35,815.26 | -0.47% |
| 2026-01-22 | Rs.175.20 | +0.66% | 36,088.66 | +0.76% |
| 2026-01-23 | Rs.173.80 | -0.80% | 35,609.90 | -1.33% |
Key Takeaways
Positive Signals: The upgrade to 'Hold' early in the week was supported by strong quarterly financial results, including a 623.68% surge in profit before tax and robust operating cash flow of ₹382.68 crores. The stock showed short-term resilience by outperforming the Sensex during periods of market weakness, and technical indicators briefly shifted from bearish to mildly bearish, suggesting some stabilisation.
Cautionary Signals: Despite short-term improvements, the technical momentum deteriorated to outright bearish by midweek, culminating in a downgrade to 'Sell'. Long-term growth remains subdued with operating profit declining at an annualised rate of -1.49% over five years. Valuation metrics such as a high PEG ratio of 22.3 and a price-to-book ratio below peers reflect market scepticism. The stock’s one-year return of -18.45% significantly lags the Sensex’s positive 8.01%, underscoring persistent challenges.
Conclusion
Finolex Industries Ltd experienced a week marked by mixed technical signals and shifting analyst sentiment. While strong quarterly earnings provided a temporary boost and justified an upgrade to 'Hold', deteriorating technical indicators and long-term growth concerns led to a downgrade to 'Sell' by week’s end. The stock’s relative outperformance against the Sensex during a broadly weak market highlights some resilience, but the prevailing bearish momentum and valuation caution suggest a cautious stance. Investors should closely monitor upcoming financial disclosures and sector developments to gauge any potential recovery or further downside risks.
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