Shriram Asset Management Co Ltd Faces Intensified Bearish Momentum Amid Technical Downgrade

Technical Trend Shift and Price Action

The technical trend for Shriram AMC has transitioned from mildly bearish to outright bearish, underscoring a growing negative sentiment among traders. The stock closed at ₹335.30, down sharply from the previous close of ₹375.10, marking a day decline of 10.61%. Intraday volatility was pronounced, with a low of ₹320.00 and a high of ₹381.50, reflecting uncertainty and selling pressure.

Over the past week, the stock has underperformed the broader market, with a one-week return of -11.65% compared to the Sensex’s -2.43%. This underperformance extends to longer periods, with a one-month return of -16.08% versus Sensex’s -4.66%, and a year-to-date decline of -20.50% against the Sensex’s -4.32%. Even on a one-year basis, Shriram AMC has fallen 28.16%, while the Sensex gained 6.56%, highlighting a clear divergence from benchmark performance.

MACD and Momentum Indicators

The Moving Average Convergence Divergence (MACD) indicator presents a bearish outlook on the weekly chart, signalling that downward momentum is strengthening. The monthly MACD remains mildly bearish, suggesting that while the longer-term trend is negative, it is not yet decisively so. This divergence between weekly and monthly MACD readings indicates that short-term selling pressure is intensifying, but the longer-term trend may still hold some resilience.

The Know Sure Thing (KST) indicator adds nuance to this picture. On a weekly basis, KST is mildly bullish, hinting at some underlying strength or potential for a short-term bounce. However, the monthly KST remains mildly bearish, aligning with the broader negative trend. This mixed momentum reading suggests that while short-term traders might find opportunities, the overall trend remains under pressure.

RSI and Overbought/Oversold Conditions

The Relative Strength Index (RSI) presents a contrasting view. On the weekly chart, RSI currently shows no clear signal, indicating neither overbought nor oversold conditions. This neutral stance suggests that the stock is not yet in an extreme momentum phase on a short-term basis. However, the monthly RSI is bullish, implying that over the longer term, the stock may have some underlying strength or potential for recovery.

Despite the bearish price action, the monthly RSI’s bullish reading could indicate that the stock is approaching a level where buyers might step in, especially if accompanied by other positive catalysts. Investors should monitor this closely, as a sustained RSI improvement could signal a reversal or at least a pause in the downtrend.

Moving Averages and Bollinger Bands

Moving averages on the daily timeframe reinforce the bearish outlook. The stock is trading below key moving averages, which typically act as resistance in a downtrend. This positioning suggests that the prevailing momentum is negative and that any rallies may face selling pressure near these averages.

Bollinger Bands further confirm the bearish environment. Both weekly and monthly Bollinger Bands are signalling bearish conditions, with the stock price hugging or breaching the lower bands. This pattern often reflects increased volatility and downward pressure, signalling that the stock is trading near oversold levels but with no immediate sign of reversal.

Volume and Dow Theory Signals

Volume-based indicators such as On-Balance Volume (OBV) lack clear signals on both weekly and monthly charts, suggesting that volume trends are not decisively supporting either buyers or sellers at present. This absence of volume confirmation adds to the uncertainty surrounding the stock’s near-term direction.

Dow Theory assessments on weekly and monthly timeframes are mildly bearish, aligning with the broader technical consensus. This indicates that the stock’s primary trend remains downward, with lower highs and lower lows characterising price action.

Valuation and Market Capitalisation Context

Shriram AMC’s current market capitalisation grade stands at 4, reflecting a mid-tier valuation within its sector. The company’s Mojo Score has deteriorated to 12.0, resulting in a Strong Sell grade as of 18 Aug 2025, upgraded from a previous Sell rating. This downgrade reflects the accumulation of negative technical signals and weak price momentum.

Despite the recent weakness, Shriram AMC’s long-term returns remain impressive. Over a 10-year horizon, the stock has delivered a staggering 1,036.61% return, significantly outperforming the Sensex’s 233.68% gain. Similarly, five-year returns of 297.51% versus Sensex’s 66.82% highlight the company’s strong historical performance. However, the recent technical deterioration suggests caution for investors looking to enter or add to positions at current levels.

Investor Takeaway and Outlook

The technical landscape for Shriram Asset Management Co Ltd currently favours caution. The convergence of bearish MACD readings, daily moving averages resistance, and negative Bollinger Band signals point to sustained downward momentum. While monthly RSI and weekly KST offer some mild bullish hints, these are insufficient to offset the prevailing negative trend.

Investors should be mindful of the stock’s recent underperformance relative to the Sensex and sector peers. The Strong Sell Mojo Grade and deteriorated technical trend suggest that further downside risk remains elevated in the near term. However, the stock’s attractive long-term returns and occasional short-term bullish signals may offer tactical opportunities for nimble traders willing to monitor momentum shifts closely.

In summary, Shriram AMC’s technical indicators collectively signal a bearish momentum phase, with limited evidence of an imminent reversal. Market participants should weigh these signals carefully against fundamental factors and broader market conditions before making investment decisions.

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