Mercury EV-Tech Ltd Faces Bearish Momentum Amid Technical Indicator Shifts

Technical Trend Shift and Price Momentum

The stock’s technical trend has shifted from mildly bearish to outright bearish, reflecting a growing negative sentiment among traders. Mercury EV-Tech’s price has declined from a previous close of ₹37.31 to a low of ₹34.99 today, with a high of ₹37.85, indicating intraday volatility. The 52-week high stands at ₹76.93, while the 52-week low is ₹29.95, placing the current price closer to the lower end of its annual range.

This downward momentum is further underscored by the daily moving averages, which remain bearish, signalling that short-term price action is under pressure. The stock’s inability to sustain levels above key moving averages suggests that sellers are dominating, and the risk of further declines remains elevated.

MACD and RSI Analysis

The Moving Average Convergence Divergence (MACD) indicator presents a mixed scenario. On a weekly basis, the MACD is mildly bullish, hinting at some underlying positive momentum in the medium term. However, the monthly MACD is bearish, indicating that the longer-term trend remains weak and vulnerable to further downside. This divergence between weekly and monthly MACD readings suggests that while short-term rallies may occur, the broader trend is still unfavourable.

Relative Strength Index (RSI) readings on both weekly and monthly charts show no clear signal, hovering in neutral zones. This lack of directional RSI momentum implies that the stock is neither overbought nor oversold, but the absence of a strong RSI signal means investors should be cautious and watch for further developments before committing to a position.

Bollinger Bands and Volatility

Bollinger Bands on both weekly and monthly timeframes are bearish, reflecting increased volatility and a tendency for the stock price to trade near the lower band. This pattern often indicates selling pressure and a potential continuation of the downtrend. The contraction or expansion of these bands will be critical to monitor, as a breakout could signal a reversal or acceleration of the current trend.

Moving Averages and KST Indicator

Daily moving averages remain bearish, reinforcing the short-term downtrend. This is a critical signal for traders relying on moving average crossovers to time entries and exits. The stock’s failure to break above these averages suggests persistent selling pressure.

The Know Sure Thing (KST) indicator adds nuance to the analysis. On a weekly basis, KST is mildly bullish, indicating some short-term positive momentum. Conversely, the monthly KST is mildly bearish, aligning with the longer-term MACD and Bollinger Band signals. This divergence highlights the stock’s current technical uncertainty, with short-term rallies likely to be met with resistance.

Dow Theory and On-Balance Volume (OBV)

According to Dow Theory, the weekly trend is mildly bearish, while the monthly trend shows no clear direction. This suggests that the stock is in a consolidation phase on a longer timeframe but remains vulnerable to further downside in the near term.

On-Balance Volume (OBV) data is unavailable for both weekly and monthly periods, limiting volume-based confirmation of price moves. This absence makes it harder to gauge the strength behind recent price declines, adding to the cautious outlook.

Comparative Performance Versus Sensex

Mercury EV-Tech’s returns have been volatile and generally underwhelming compared to the broader market benchmark, the Sensex. Over the past week, the stock declined by 4.7%, while the Sensex gained 0.23%. Over the last month, however, Mercury EV-Tech posted a strong 13.4% return, outperforming the Sensex’s 0.77% gain. Year-to-date, the stock is down 4.67%, slightly worse than the Sensex’s 2.82% decline.

Longer-term returns paint a more challenging picture. Over the past year, Mercury EV-Tech has plummeted 47.9%, while the Sensex rose 9.35%. Despite this, the stock has delivered impressive gains over three and ten years, with returns of 96.55% and 874.59% respectively, far outpacing the Sensex’s 36.45% and 249.29% over the same periods. This disparity highlights the stock’s high volatility and cyclical nature within the automobile sector.

Mojo Score and Analyst Ratings

MarketsMOJO assigns Mercury EV-Tech a Mojo Score of 21.0, reflecting a strong sell recommendation. This is a downgrade from the previous Sell grade, effective from 20 May 2025, signalling deteriorating fundamentals and technical outlook. The Market Cap Grade is 4, indicating a relatively low market capitalisation compared to peers, which may contribute to higher volatility and risk.

The downgrade to Strong Sell aligns with the bearish technical indicators and weak price momentum, suggesting investors should exercise caution and consider risk management strategies.

Outlook and Investor Considerations

Given the current technical landscape, Mercury EV-Tech appears to be in a precarious position. The confluence of bearish moving averages, negative monthly MACD, and bearish Bollinger Bands suggests that the stock may continue to face downward pressure in the near term. While weekly indicators such as MACD and KST show mild bullishness, these are insufficient to offset the broader negative trend.

Investors should closely monitor key support levels near the 52-week low of ₹29.95 and watch for any signs of volume-driven reversals. The absence of strong RSI signals means that the stock is not yet oversold, leaving room for further declines. Risk-averse investors may prefer to avoid new positions until clearer technical confirmation emerges.

Summary

Mercury EV-Tech Ltd’s technical indicators collectively point to a bearish momentum shift, with the stock currently trading near its lower annual range. The downgrade to a Strong Sell by MarketsMOJO reflects the deteriorating technical and fundamental outlook. While short-term indicators offer some mild bullish signals, the dominant trend remains negative, cautioning investors to remain vigilant.

Long-term investors may recall the stock’s impressive multi-year returns, but the recent volatility and technical weakness suggest that patience and careful analysis are required before considering new exposure. Monitoring key technical levels and volume patterns will be essential to gauge any potential recovery or further decline.

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