Shriram Finance Technical Momentum Shifts Signal Bullish Outlook

Technical Momentum and Price Movement

Shriram Finance’s current price stands at ₹854.60, marking a modest change from the previous close of ₹848.15. The stock’s intraday range today extended from a low of ₹846.00 to a high of ₹870.40, approaching its 52-week high of ₹871.25. This price behaviour indicates a consolidation near the upper end of its annual trading range, which spans from ₹493.60 to ₹871.25.

The recent adjustment in the company’s evaluation metrics has coincided with a transition in the technical trend from mildly bullish to outright bullish. This shift is underscored by the daily moving averages signalling a positive trajectory, which often serves as a foundation for sustained upward momentum in equity prices.

MACD and Momentum Indicators

The Moving Average Convergence Divergence (MACD) indicator presents a bullish signal on both weekly and monthly charts. This alignment across multiple timeframes suggests that the underlying momentum is strengthening, with the MACD line positioned above its signal line, typically interpreted as a positive sign for price continuation.

Complementing this, the KST (Know Sure Thing) indicator shows a bullish stance on the weekly chart, although it remains mildly bearish on the monthly scale. This divergence may indicate some caution among longer-term investors, but the shorter-term momentum appears to be gaining traction.

RSI and Overbought Conditions

The Relative Strength Index (RSI) on both weekly and monthly charts currently does not present a definitive signal. This neutral reading implies that the stock is neither overbought nor oversold, allowing room for further price movement without immediate risk of a reversal due to extreme conditions.

Bollinger Bands and Volatility

Bollinger Bands on weekly and monthly timeframes indicate a bullish pattern, with the price trending near the upper band. This suggests increased volatility but also reflects a strong price momentum. Traders often view such positioning as a sign of strength, although it can sometimes precede a period of consolidation or pullback.

Volume and On-Balance Volume (OBV)

The On-Balance Volume (OBV) indicator shows a bullish trend on the monthly chart, signalling that volume is supporting the price movement over the longer term. However, the weekly OBV remains without a clear trend, which may reflect short-term indecision among market participants.

Moving Averages and Daily Trends

The daily moving averages for Shriram Finance are signalling a bullish trend, reinforcing the positive momentum observed in other technical indicators. This suggests that the stock’s short-term price action is aligned with a broader upward movement, which can attract momentum-driven investors.

However, the Dow Theory presents a more nuanced picture. While the weekly Dow Theory indicator is mildly bearish, the monthly reading shows no clear trend. This mixed signal may reflect some underlying market uncertainty or consolidation phases, which investors should consider alongside other technical factors.

Comparative Returns and Market Context

When viewed against the broader market, Shriram Finance’s returns have outpaced the Sensex across multiple periods. Over the past week, the stock recorded a return of 2.46%, compared to the Sensex’s 0.13%. This trend extends over longer horizons, with the stock showing a 5.61% return over one month versus the Sensex’s 0.77%, and a year-to-date return of 47.60% against the Sensex’s 9.05%.

Over one year, Shriram Finance’s return stands at 35.10%, significantly above the Sensex’s 3.75%. The outperformance is even more pronounced over three, five, and ten-year periods, with returns of 206.19%, 291.07%, and 440.61% respectively, compared to the Sensex’s 37.89%, 84.19%, and 236.54% for the same durations.

Sector and Industry Considerations

Shriram Finance operates within the Non Banking Financial Company (NBFC) sector, a segment that has seen varied performance due to regulatory changes and economic cycles. The company’s technical momentum shift may reflect broader sectoral trends, including increased lending activity and improving asset quality, which can influence investor sentiment.

Given the sector’s sensitivity to interest rate movements and credit demand, the current technical signals could be indicative of market participants factoring in positive developments or expectations for the NBFC space.

Investor Implications and Outlook

The recent revision in Shriram Finance’s evaluation metrics and the accompanying technical signals suggest a strengthening momentum that may attract increased investor attention. The alignment of bullish indicators such as MACD, Bollinger Bands, and moving averages across daily, weekly, and monthly timeframes points to a positive technical outlook.

Nonetheless, some mixed signals from the Dow Theory and KST indicators on longer timeframes advise a degree of caution. Investors may wish to monitor volume trends and RSI readings closely to gauge whether the current momentum can be sustained or if a consolidation phase is imminent.

Overall, Shriram Finance’s technical profile reflects a stock that is navigating a phase of enhanced momentum within the NBFC sector, supported by strong relative returns compared to the broader market benchmarks.

Summary of Key Technical Indicators for Shriram Finance

• MACD: Bullish on weekly and monthly charts


• RSI: Neutral on weekly and monthly charts


• Bollinger Bands: Bullish on weekly and monthly charts


• Moving Averages: Bullish on daily chart


• KST: Bullish weekly, mildly bearish monthly


• Dow Theory: Mildly bearish weekly, no trend monthly


• OBV: No trend weekly, bullish monthly

These indicators collectively illustrate a nuanced but predominantly positive technical environment for Shriram Finance as it approaches the end of the calendar year 2025.

Only for Rs. 14,999 - Get Access to 2 Years + 6 Months of All Premium Features on MarketsMojo. As low as ₹500/month! Claim 83% OFF →