Shalimar Paints Ltd. Faces Intensified Downtrend Amid Technical Weakness

Technical Trend Shift: From Mildly Bearish to Bearish

Recent technical assessments indicate that Shalimar Paints’ overall trend has deteriorated from mildly bearish to outright bearish. This shift is primarily driven by the daily moving averages, which currently maintain a bearish stance, reflecting sustained selling pressure. The stock closed at ₹63.70 on 30 Jan 2026, down 2.00% from the previous close of ₹65.00, with intraday lows touching ₹63.64 and highs at ₹65.09. This price action underscores the prevailing weakness despite minor intraday recoveries.

The 52-week price range further highlights the stock’s vulnerability, with a high of ₹143.80 and a low of ₹54.10. The current price remains closer to the lower end of this spectrum, signalling a lack of upward momentum over the past year.

MACD and RSI: Divergent Signals Across Timeframes

The Moving Average Convergence Divergence (MACD) indicator presents a mixed picture. On a weekly basis, the MACD remains mildly bullish, suggesting some short-term positive momentum. However, the monthly MACD is firmly bearish, indicating that the longer-term trend is weakening. This divergence between weekly and monthly MACD readings suggests that while short-term traders might find some buying opportunities, the broader trend remains unfavourable.

Relative Strength Index (RSI) readings on both weekly and monthly charts currently provide no clear signals, hovering in neutral zones. This lack of directional RSI momentum implies that the stock is neither overbought nor oversold, but the absence of bullish RSI confirmation adds to the cautious outlook.

Bollinger Bands and KST Confirm Bearish Bias

Bollinger Bands on weekly and monthly charts are mildly bearish, with the stock price frequently testing the lower band. This behaviour typically signals increased volatility and potential continuation of downward price pressure. The Know Sure Thing (KST) indicator, a momentum oscillator, aligns with this bearish narrative, showing bearish signals on both weekly and monthly timeframes.

Additional Technical Indicators: Dow Theory and OBV

According to Dow Theory, the weekly chart shows no definitive trend, while the monthly chart is mildly bearish. This suggests that the stock has yet to establish a clear directional trend in the short term but is under pressure over the longer horizon. On-Balance Volume (OBV) analysis supports this view, with weekly readings showing no trend and monthly OBV mildly bearish, indicating that volume flow is not favouring buyers.

Comparative Performance: Shalimar Paints vs Sensex

Shalimar Paints’ returns starkly contrast with the broader market benchmark, the Sensex. Over the past week, the stock declined by 1.77%, while the Sensex gained 0.31%. Over one month, however, Shalimar Paints posted a notable 9.19% gain, outperforming the Sensex’s 2.51% decline. Year-to-date, the stock has risen 3.24%, whereas the Sensex has fallen 3.11%. Despite these short-term gains, the longer-term performance remains deeply concerning.

Over one year, Shalimar Paints has plummeted 52.69%, while the Sensex advanced 7.88%. The three-year and five-year returns are even more stark, with Shalimar Paints down 57.43% and 37.67% respectively, compared to Sensex gains of 39.16% and 78.38%. Over a decade, the stock has declined 28.41%, while the Sensex surged 231.98%. These figures highlight the company’s sustained underperformance and the challenges it faces in regaining investor confidence.

Moving Averages and Daily Momentum

The daily moving averages for Shalimar Paints are decisively bearish, reinforcing the negative momentum. The stock price remains below key moving averages such as the 50-day and 200-day, which typically act as resistance levels in a downtrend. This technical positioning suggests that any rallies are likely to face selling pressure near these averages, limiting upside potential in the near term.

Given the daily bearish moving averages and the monthly MACD’s negative stance, the stock is currently in a technical downtrend that may persist unless there is a significant catalyst to reverse sentiment.

Market Capitalisation and Mojo Ratings

Shalimar Paints holds a Market Cap Grade of 4, indicating a mid-tier market capitalisation relative to its peers. The company’s Mojo Score stands at 3.0, with a recent downgrade from Sell to Strong Sell on 23 April 2024. This downgrade reflects deteriorating fundamentals and technicals, signalling caution for investors. The Strong Sell rating is consistent with the bearish technical indicators and the company’s weak price performance over multiple time horizons.

Outlook and Investor Considerations

Investors analysing Shalimar Paints should weigh the mixed short-term signals against the clear long-term downtrend. While weekly MACD and monthly Bollinger Bands suggest some short-term volatility and potential for minor rebounds, the dominant technical narrative remains bearish. The stock’s persistent underperformance relative to the Sensex and its failure to sustain rallies above key moving averages underscore the challenges ahead.

Given the Strong Sell Mojo Grade and the technical deterioration, investors may consider reducing exposure or seeking alternative opportunities within the paints sector or broader market.

Summary

Shalimar Paints Ltd. is currently navigating a challenging technical landscape marked by a shift to bearish momentum across multiple indicators. The stock’s failure to break above key moving averages, combined with bearish monthly MACD and KST signals, suggests that the downtrend may continue. Despite some short-term positive returns and mildly bullish weekly MACD, the overall technical and fundamental outlook remains negative, as reflected in the Strong Sell Mojo Grade.

Investors should remain cautious and consider peer comparisons and alternative investment opportunities within the sector to optimise portfolio performance.

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