Shanthi Gears Ltd. Faces Bearish Momentum Amid Technical Downgrade

Technical Momentum Shifts to Bearish

Shanthi Gears’ technical trend has shifted from mildly bearish to outright bearish, signalling increased downside pressure. The daily moving averages have turned decisively bearish, with the stock price currently trading at ₹451.80, down 4.42% from the previous close of ₹472.70. This decline is significant given the stock’s 52-week high of ₹620.70 and a low of ₹386.00, indicating that the price is closer to its lower range, reflecting weakening investor confidence.

The Moving Average Convergence Divergence (MACD) indicator presents a mixed picture. On a weekly basis, the MACD is bearish, confirming the downward momentum, while the monthly MACD remains mildly bearish, suggesting that longer-term momentum is also under pressure but not yet fully negative. This divergence between weekly and monthly MACD readings often precedes further price weakness if the monthly trend deteriorates further.

RSI and Bollinger Bands Signal Caution

The Relative Strength Index (RSI) on both weekly and monthly charts currently shows no clear signal, hovering in neutral territory. This lack of momentum in RSI suggests that the stock is neither oversold nor overbought, but the absence of bullish RSI readings fails to provide any immediate relief to the bearish outlook.

Bollinger Bands add to the cautious tone. Weekly Bollinger Bands indicate a mildly bearish stance, while monthly bands are outright bearish. The stock price is trading near the lower band on the weekly chart, which often signals increased volatility and potential for further downside. The monthly bearish Bollinger Bands reinforce the longer-term negative momentum.

Additional Technical Indicators Confirm Downtrend

The Know Sure Thing (KST) indicator, a momentum oscillator, is bearish on both weekly and monthly timeframes, reinforcing the negative price momentum. Meanwhile, Dow Theory analysis shows no clear trend on the weekly chart but a mildly bearish trend on the monthly chart, indicating that the broader market forces may be exerting downward pressure on Shanthi Gears.

Interestingly, the On-Balance Volume (OBV) indicator is bullish on both weekly and monthly charts, suggesting that despite price declines, there is accumulation by volume. This divergence between price and volume could indicate that some investors are positioning for a potential rebound, though the prevailing technical signals remain negative.

Market Capitalisation and Mojo Score Reflect Weakness

Shanthi Gears holds a Market Cap Grade of 3, reflecting a mid-tier capitalisation within its sector. The company’s Mojo Score has deteriorated to 19.0, leading to a downgrade from Sell to Strong Sell on 03 Nov 2025. This downgrade by MarketsMOJO highlights the deteriorating fundamentals and technical outlook, signalling investors to exercise caution.

Price Performance Compared to Sensex

Despite the recent technical weakness, Shanthi Gears has delivered mixed returns relative to the Sensex over various time horizons. Over the past week, the stock outperformed the benchmark with a 10.97% gain versus the Sensex’s 2.43% decline, indicating short-term resilience. However, this outperformance was not sustained over longer periods. The one-month return was -4.18%, slightly better than the Sensex’s -4.66%, and year-to-date returns show a marginally smaller decline of -4.02% compared to the Sensex’s -4.32%.

Over the one-year period, Shanthi Gears underperformed significantly, posting a -1.92% return against the Sensex’s 6.56% gain. This underperformance extends to the three-year horizon, where the stock’s 30.43% return trails the Sensex’s 33.80%. However, the company’s long-term performance remains impressive, with five-year and ten-year returns of 271.70% and 400.33% respectively, substantially outpacing the Sensex’s 66.82% and 233.68% gains. This long-term outperformance underscores Shanthi Gears’ historical growth potential despite current headwinds.

Valuation and Sector Context

Operating within the industrial manufacturing sector, Shanthi Gears faces sector-wide challenges including cyclical demand fluctuations and input cost pressures. The current bearish technical signals may reflect broader sector weakness as well as company-specific factors. Investors should weigh these technical indicators alongside fundamental analysis before making investment decisions.

Given the stock’s current price near ₹451.80, well below its 52-week high, and the bearish daily moving averages, the risk of further downside remains elevated. The divergence between bullish OBV and bearish price momentum suggests that while some accumulation is occurring, it has not yet translated into a sustained price recovery.

Investor Takeaway

Shanthi Gears Ltd.’s recent technical deterioration, highlighted by bearish MACD, moving averages, and Bollinger Bands, signals caution for investors. The downgrade to a Strong Sell by MarketsMOJO reinforces the negative outlook. While volume indicators suggest some accumulation, the overall momentum remains weak, and the stock price is trending towards its lower 52-week range.

Investors should monitor the monthly MACD and Bollinger Bands closely for signs of further deterioration or potential reversal. Given the stock’s mixed short-term performance and strong long-term returns, a cautious approach is warranted, balancing technical signals with fundamental analysis and sector trends.

In summary, Shanthi Gears currently faces a challenging technical environment, and investors should consider alternative opportunities within the industrial manufacturing sector or broader market until clearer signs of recovery emerge.

Upgrade at special rates, valid only for the next few days. Claim Your Special Rate →