SJVN Ltd. Technical Momentum Shifts to Bearish Amid Market Volatility

Technical Indicators Signal Bearish Momentum

The latest technical analysis reveals a clear deterioration in SJVN Ltd.’s price momentum. The Moving Average Convergence Divergence (MACD) indicator, a widely followed momentum oscillator, remains bearish on both weekly and monthly charts, indicating sustained downward pressure on the stock’s price. This aligns with the daily moving averages, which also reflect a bearish stance, suggesting that short-term price trends are unfavourable.

Meanwhile, the Relative Strength Index (RSI) on weekly and monthly timeframes shows no definitive signal, hovering in a neutral zone. This lack of momentum confirmation from RSI suggests that while the stock is not yet oversold, it lacks the buying strength to reverse the current downtrend.

Bollinger Bands further reinforce the bearish outlook, with the weekly bands indicating a clear bearish trend and the monthly bands mildly bearish. The stock’s price has been trading near the lower band on the weekly chart, signalling increased volatility and potential continuation of the downward move.

Additional Technical Metrics Paint a Mixed Picture

The Know Sure Thing (KST) indicator, which aggregates multiple rate-of-change calculations, confirms the bearish momentum on both weekly and monthly scales. This suggests that the stock’s price momentum is weakening across multiple time horizons.

However, the Dow Theory presents a nuanced view: weekly signals are mildly bullish, hinting at some short-term support or potential for a minor rebound, while monthly signals remain mildly bearish, consistent with the broader downtrend.

On the volume front, the On-Balance Volume (OBV) indicator is bullish on both weekly and monthly charts, indicating that despite price declines, buying volume has been relatively strong. This divergence between price and volume could imply accumulation by informed investors or a potential base-building phase.

Price Action and Market Context

SJVN Ltd.’s current price stands at ₹78.12, down 2.29% from the previous close of ₹79.95. The stock traded within a range of ₹77.90 to ₹80.30 during the day, remaining well below its 52-week high of ₹107.50 but comfortably above its 52-week low of ₹69.82. This price action reflects a consolidation phase amid bearish technical signals.

Comparing SJVN’s returns against the Sensex reveals a mixed performance. Over the past week, the stock declined by 5.86%, significantly underperforming the Sensex’s 2.55% drop. However, over the last month and year-to-date periods, SJVN outperformed the benchmark with gains of 5.75% and 4.47%, respectively, while the Sensex posted losses of 1.29% and 1.93%. Conversely, the stock’s one-year return is deeply negative at -22.46%, contrasting with the Sensex’s 7.67% gain.

Longer-term returns remain impressive, with three-year and five-year gains of 128.42% and 191.49%, respectively, far outpacing the Sensex’s 37.58% and 71.32% returns. Over a decade, however, the Sensex’s 235.19% return surpasses SJVN’s 140.74%, reflecting broader market strength over that period.

Mojo Score and Grade Downgrade Reflect Technical Weakness

MarketsMOJO’s proprietary scoring system assigns SJVN Ltd. a Mojo Score of 21.0, categorising it as a Strong Sell. This represents a downgrade from its previous Sell rating on 6 Nov 2024, signalling a deterioration in technical and fundamental factors. The company’s Market Cap Grade remains low at 2, indicating limited market capitalisation strength relative to peers.

The downgrade is consistent with the technical trend shifting from mildly bearish to outright bearish, underscoring increased downside risk. Investors should note that such a rating reflects a combination of price momentum, volume trends, and other technical parameters, suggesting caution in holding or initiating positions at current levels.

Sector and Industry Context

SJVN operates within the Power industry and sector, which has faced mixed headwinds amid fluctuating energy demand and regulatory changes. While the broader power sector has seen pockets of strength, SJVN’s technical signals and price action indicate it is currently under pressure relative to some peers. The divergence between bullish volume indicators and bearish price momentum may reflect sector rotation or selective investor interest.

Investor Implications and Outlook

Given the bearish technical indicators, including MACD, moving averages, and KST, investors should approach SJVN Ltd. with caution. The lack of RSI confirmation and the mildly bullish weekly Dow Theory signal suggest that short-term rebounds cannot be ruled out, but the prevailing trend remains negative.

Long-term investors may find comfort in the stock’s strong multi-year returns, but the recent technical deterioration and downgrade to Strong Sell imply that near-term volatility and downside risk are elevated. Monitoring volume trends and key support levels near ₹70 will be critical to assess whether the stock can stabilise or if further declines are likely.

Conclusion: Technical Weakness Amid Mixed Fundamentals

SJVN Ltd.’s recent technical parameter changes highlight a shift towards bearish momentum, with multiple indicators confirming increased downside risk. The downgrade to a Strong Sell Mojo Grade reflects this deterioration, urging investors to exercise caution. While volume indicators suggest some underlying buying interest, the overall technical landscape remains unfavourable.

Investors should weigh the stock’s strong historical returns against the current technical challenges and sector dynamics. Close attention to price support levels and broader market trends will be essential in determining the stock’s near-term trajectory. Until a clear reversal in momentum is observed, a defensive stance appears prudent.

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