Manappuram Finance Ltd Technical Momentum Shifts Amid Mixed Indicator Signals

Technical Trend Overview and Price Movement

Manappuram Finance’s current market price stands at ₹291.65, down from the previous close of ₹295.30. The stock’s 52-week high is ₹320.95, while the low is ₹169.10, indicating a significant range of volatility over the past year. Today’s intraday trading saw a high of ₹298.90 and a low of ₹289.05, reflecting a relatively tight band around the current price level.

The technical trend has shifted from bullish to mildly bullish, signalling a tempering of the prior strong upward momentum. This subtle change suggests that while the stock retains positive undercurrents, investors should be alert to potential consolidation or minor pullbacks in the near term.

MACD Signals: Divergent Weekly and Monthly Perspectives

The Moving Average Convergence Divergence (MACD) indicator offers a mixed outlook for Manappuram Finance. On a weekly basis, the MACD is mildly bearish, indicating some short-term weakening in momentum. This could be reflective of recent price declines and a possible cooling off after prior gains. Conversely, the monthly MACD remains bullish, suggesting that the longer-term trend continues to favour upward movement.

This divergence between weekly and monthly MACD readings is a critical signal for traders and investors. It implies that while short-term momentum may be faltering, the broader trend remains intact, potentially offering buying opportunities on dips for those with a longer investment horizon.

RSI and Bollinger Bands: Neutral to Mildly Bullish Signals

The Relative Strength Index (RSI) on both weekly and monthly charts currently shows no definitive signal, hovering in neutral territory. This indicates that the stock is neither overbought nor oversold, providing a balanced backdrop without extreme momentum pressures.

Bollinger Bands, however, present a mildly bullish stance on both weekly and monthly timeframes. The stock price is trading near the upper band, which often suggests sustained buying interest and potential for further upward movement, albeit with caution due to the risk of volatility expansion.

Moving Averages and KST: Mildly Bullish to Bullish Momentum

Daily moving averages for Manappuram Finance are mildly bullish, indicating that short-term price averages are trending upwards, supporting the current price level. This is a positive sign for momentum traders looking for confirmation of trend continuation.

The Know Sure Thing (KST) indicator, a momentum oscillator, is bullish on both weekly and monthly charts. This reinforces the notion that the stock’s momentum remains positive over medium and longer-term periods, despite some short-term softness.

Dow Theory and On-Balance Volume (OBV) Insights

According to Dow Theory, the weekly trend is mildly bullish while the monthly trend is bullish. This alignment with other momentum indicators suggests that the stock is in a phase of gradual accumulation and upward trend development.

However, the On-Balance Volume (OBV) indicator shows no clear trend on either weekly or monthly charts. This lack of volume confirmation could imply that price movements are not strongly supported by trading volume, warranting caution among volume-sensitive investors.

Comparative Returns and Market Context

Manappuram Finance has delivered impressive long-term returns relative to the Sensex benchmark. Over the past 10 years, the stock has surged by 978.19%, vastly outperforming the Sensex’s 236.52% gain. Similarly, over three years, the stock returned 159.36% compared to the Sensex’s 38.79%, and over five years, it posted a 90.19% gain versus the Sensex’s 75.67%.

However, recent shorter-term returns have been less favourable. Year-to-date, the stock has declined by 5.43%, underperforming the Sensex’s 3.37% drop. Over the past month, the stock fell 7.03%, compared to the Sensex’s 3.17% decline, and over the last week, it dropped 2.38% while the Sensex gained 0.53%. These figures highlight the stock’s recent volatility and the need for careful technical analysis.

Mojo Score and Grade Update

MarketsMOJO assigns Manappuram Finance a Mojo Score of 50.0, reflecting a neutral stance. The Mojo Grade has recently been upgraded from Sell to Hold as of 18 February 2025, signalling a cautious but improving outlook. The Market Cap Grade stands at 3, indicating a mid-tier market capitalisation within the NBFC sector.

This upgrade in rating aligns with the mixed technical signals observed, suggesting that while the stock is not yet a strong buy, it is showing signs of stabilisation and potential for moderate gains.

Investor Takeaway and Outlook

Manappuram Finance Ltd’s technical parameters reveal a stock in transition. The shift from bullish to mildly bullish trend, combined with mixed MACD signals and neutral RSI readings, suggests that investors should adopt a balanced approach. The bullish KST and Dow Theory trends provide a foundation for optimism, but the absence of strong volume confirmation via OBV and recent price declines warrant prudence.

Long-term investors may find value in the stock’s historical outperformance relative to the Sensex, while short-term traders should monitor key technical levels and momentum indicators closely. The current price near ₹291.65, below the recent high of ₹320.95, offers a potential entry point for those seeking exposure to the NBFC sector with a moderate risk appetite.

Overall, Manappuram Finance remains a Hold-rated stock with mildly bullish technical underpinnings, making it suitable for investors who favour a measured approach amid evolving market conditions.

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