Shalimar Paints Ltd. Faces Intensified Bearish Momentum Amid Technical Downgrade

Price Performance and Market Context

As of 9 January 2026, Shalimar Paints Ltd. closed at ₹70.26, down 3.69% from the previous close of ₹72.95. The intraday range saw a high of ₹73.13 and a low of ₹69.35, reflecting heightened volatility. The stock remains significantly below its 52-week high of ₹143.80, while comfortably above its 52-week low of ₹54.10. This wide trading range highlights the stock’s struggle to regain upward momentum over the past year.

Comparatively, the broader Sensex index has outperformed Shalimar Paints substantially over multiple time horizons. While the Sensex posted a 7.72% gain over the past year, Shalimar Paints declined by 44.24%. Over five and ten years, the divergence is even starker, with the Sensex up 72.56% and 237.61% respectively, whereas Shalimar Paints has fallen by approximately 29% in both periods. This underperformance emphasises the stock’s ongoing challenges within the paints sector.

Technical Trend Shift: From Mildly Bearish to Bearish

Recent technical assessments reveal a clear shift in Shalimar Paints’ momentum. The overall technical trend has transitioned from mildly bearish to outright bearish, signalling increased downside risk. This shift is corroborated by multiple technical indicators across different time frames.

The Moving Average Convergence Divergence (MACD) indicator presents a mixed picture: the weekly MACD remains mildly bullish, suggesting some short-term positive momentum, but the monthly MACD has turned bearish, indicating longer-term weakness. This divergence suggests that while short-term rallies may occur, the dominant trend remains negative.

The Relative Strength Index (RSI) further confirms this bearish bias. On a weekly basis, the RSI is firmly bearish, reflecting weakening price strength and increasing selling pressure. The monthly RSI, however, currently shows no clear signal, implying that the longer-term momentum is neutral but vulnerable to deterioration if selling persists.

Moving Averages and Bollinger Bands Signal Weakness

Daily moving averages for Shalimar Paints are mildly bearish, with the stock price trading below key short-term averages such as the 20-day and 50-day moving averages. This positioning typically indicates a lack of buying interest and potential for further declines if the stock fails to reclaim these levels.

Bollinger Bands analysis adds to the cautious outlook. On a weekly basis, the bands are bearish, with the stock price gravitating towards the lower band, signalling increased volatility and downward pressure. The monthly Bollinger Bands are mildly bearish, reinforcing the view that the stock is under pressure but not yet in an extreme oversold condition.

Additional Momentum Indicators Confirm Bearish Outlook

The Know Sure Thing (KST) indicator, which aggregates multiple rate-of-change measures, is bearish on both weekly and monthly charts. This suggests that momentum is weakening consistently across short and longer-term horizons, reinforcing the negative technical stance.

Dow Theory analysis presents a nuanced view: the weekly chart shows no clear trend, indicating indecision in the near term, while the monthly chart is mildly bearish, hinting at a gradual erosion of bullish conviction over time.

On-Balance Volume (OBV), a volume-based indicator that tracks buying and selling pressure, shows no trend on the weekly scale but is mildly bearish monthly. This suggests that volume is not strongly supporting price advances, and selling pressure may be increasing subtly.

Mojo Score and Ratings Reflect Elevated Risk

MarketsMOJO assigns Shalimar Paints a Mojo Score of 3.0, categorising it as a Strong Sell. This represents a downgrade from the previous Sell rating as of 23 April 2024, reflecting deteriorating fundamentals and technicals. The Market Cap Grade stands at 4, indicating a relatively small market capitalisation that may contribute to higher volatility and liquidity concerns.

The downgrade to Strong Sell aligns with the technical signals and price momentum shifts observed, signalling that investors should exercise caution and consider risk management strategies when holding or contemplating exposure to this stock.

Implications for Investors and Sector Outlook

Shalimar Paints’ technical deterioration comes amid a competitive paints sector where larger players have demonstrated stronger price resilience and earnings growth. The stock’s persistent underperformance relative to the Sensex and sector peers highlights structural challenges, including market share pressures and margin constraints.

From a technical perspective, the bearish momentum indicators suggest that any rallies may be short-lived unless accompanied by significant volume support and a reversal in key oscillators such as the RSI and MACD. Investors should monitor the stock’s ability to hold above critical support levels near ₹69 and watch for any improvement in weekly and monthly momentum signals before considering fresh exposure.

Long-term investors may also weigh the stock’s valuation and fundamentals against its technical backdrop, given the sustained downtrend over the past several years. The 10-year return of -29.82% starkly contrasts with the Sensex’s robust 237.61% gain, underscoring the need for a cautious approach.

Conclusion: Technical Weakness Dominates Near-Term Outlook

In summary, Shalimar Paints Ltd. is currently navigating a challenging technical environment marked by a shift to a bearish momentum regime. Key indicators such as the MACD, RSI, moving averages, and KST collectively point to increased downside risk and subdued investor sentiment. The downgrade to a Strong Sell rating by MarketsMOJO further validates this cautious stance.

While short-term rallies cannot be ruled out given the mildly bullish weekly MACD, the prevailing trend remains negative, and investors should remain vigilant. Monitoring volume patterns, support levels, and any changes in momentum indicators will be crucial to assessing potential trend reversals or further declines.

Given these factors, Shalimar Paints currently appears to be a high-risk proposition within the paints sector, with superior alternatives available for investors seeking exposure to this space.

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