Supreme Industries Ltd Faces Bearish Momentum Amid Technical Downgrade

Technical Trend Shift and Momentum Analysis

Supreme Industries Ltd, a prominent player in the Plastic Products - Industrial sector, currently trades at ₹3,492.40, down 1.79% from the previous close of ₹3,555.95. The stock’s 52-week range spans from ₹3,020.00 to ₹4,740.00, indicating significant volatility over the past year. Recent price action shows a daily high of ₹3,572.55 and a low of ₹3,475.45, underscoring intraday weakness.

The technical trend has shifted from mildly bearish to outright bearish, reflecting a deterioration in price momentum. This shift is corroborated by multiple technical indicators across different timeframes. The Moving Average Convergence Divergence (MACD) remains bearish on both weekly and monthly charts, signalling sustained downward momentum. The daily moving averages also confirm a bearish stance, with the stock trading below key averages, suggesting sellers retain control.

Relative Strength Index (RSI) readings on weekly and monthly scales currently show no clear signal, hovering in neutral zones. This lack of momentum confirmation from RSI indicates the stock is neither oversold nor overbought, but the absence of bullish RSI divergence weakens the case for an imminent reversal.

Bollinger Bands and KST Indicator Insights

Bollinger Bands analysis reveals a bearish bias on the weekly chart and a mildly bearish outlook on the monthly chart. The stock price is approaching the lower band on the weekly timeframe, which often signals increased selling pressure and potential continuation of the downtrend. Meanwhile, the Know Sure Thing (KST) indicator aligns with this bearish narrative, showing bearish momentum on both weekly and monthly charts.

Interestingly, Dow Theory presents a mixed picture: mildly bullish on the weekly timeframe but mildly bearish on the monthly. This divergence suggests short-term attempts at recovery may be overshadowed by longer-term downward pressure. On Balance Volume (OBV) readings also reflect this duality, with mildly bullish signals weekly but mildly bearish monthly, indicating volume trends are not decisively supporting a sustained rally.

Comparative Performance Versus Sensex

Despite the technical challenges, Supreme Industries Ltd has outperformed the Sensex over several recent periods. Year-to-date, the stock has gained 4.09%, while the Sensex declined by 1.93%. Over the past month, Supreme Industries rose 4.91% compared to a 1.29% drop in the benchmark. However, over the one-year horizon, the stock has declined 24.90%, significantly underperforming the Sensex’s 7.67% gain.

Longer-term returns remain robust, with a three-year gain of 41.89% versus the Sensex’s 37.58%, a five-year gain of 94.30% compared to 71.32%, and a ten-year return of 398.27% dwarfing the Sensex’s 235.19%. These figures highlight the company’s strong historical growth trajectory despite recent technical setbacks.

Mojo Score and Grade Downgrade

MarketsMOJO assigns Supreme Industries Ltd a Mojo Score of 36.0, reflecting a Sell rating, downgraded from Hold on 23 Oct 2025. The Market Cap Grade stands at 2, indicating a mid-cap classification with moderate liquidity and market presence. This downgrade is consistent with the bearish technical signals and recent price weakness.

The downgrade signals caution for investors, as the stock’s technical deterioration may presage further downside risk. The combination of bearish MACD, moving averages, and Bollinger Bands suggests that momentum is firmly negative, and the absence of strong RSI support reduces the likelihood of a near-term rebound.

Sector and Industry Context

Operating within the Plastic Products - Industrial sector, Supreme Industries faces sector-specific headwinds including raw material cost volatility and demand fluctuations. The sector’s cyclicality often amplifies price swings, which is reflected in the stock’s wide 52-week price range. Investors should weigh these sector dynamics alongside technical signals when assessing the stock’s outlook.

Risk and Opportunity Considerations

While the technical indicators currently favour a bearish stance, the stock’s historical outperformance over longer periods suggests underlying business strength. Investors with a longer-term horizon may view current weakness as a potential entry point, provided they monitor technical developments closely. Conversely, short-term traders should exercise caution given the prevailing negative momentum and recent downgrade.

Conclusion: Technical Weakness Clouds Near-Term Outlook

Supreme Industries Ltd’s recent technical deterioration, highlighted by bearish MACD, moving averages, and Bollinger Bands, has led to a downgrade in its Mojo Grade to Sell. While the stock has demonstrated resilience relative to the Sensex in the short term, the prevailing momentum indicators suggest caution. Investors should closely monitor technical developments and sector conditions before committing fresh capital.

Long-term investors may find value in the company’s strong historical returns and underlying fundamentals, but the current technical environment warrants prudence. The mixed signals from Dow Theory and OBV imply that any short-term rallies may be limited unless confirmed by stronger volume and momentum.

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