Supreme Industries Ltd Faces Bearish Momentum Amid Technical Downgrade

Technical Trend Shift and Price Momentum

Supreme Industries Ltd, a prominent player in the Plastic Products - Industrial sector, currently trades at ₹3,358.00, down from the previous close of ₹3,468.60. The stock’s 52-week range spans from ₹3,020.00 to ₹4,740.00, highlighting significant volatility over the past year. The recent price movement has pushed the technical trend from mildly bearish to outright bearish, signalling increased selling pressure.

The daily moving averages have turned bearish, confirming the downward momentum. The stock’s intraday high of ₹3,490.80 and low of ₹3,358.00 on the latest session further illustrate the volatility and resistance faced near the upper band. This price action suggests that the bears are currently in control, with limited buying interest to support a rebound.

MACD and RSI Analysis

The Moving Average Convergence Divergence (MACD) indicator remains bearish on both weekly and monthly timeframes, reinforcing the negative momentum. The MACD line continues to stay below the signal line, indicating that the downward trend is likely to persist in the near term.

Meanwhile, the Relative Strength Index (RSI) on weekly and monthly charts shows no clear signal, hovering in a neutral zone. This lack of momentum in RSI suggests that the stock is neither oversold nor overbought, but the absence of bullish divergence implies limited upside catalysts at present.

Bollinger Bands and Moving Averages

Bollinger Bands on the weekly chart are firmly bearish, with the price trending near the lower band, signalling increased volatility and downward pressure. On the monthly scale, the bands are mildly bearish, indicating a gradual weakening of price strength over a longer horizon.

The daily moving averages have crossed into bearish territory, with the short-term averages falling below the longer-term ones. This crossover is a classic technical sell signal, often prompting traders to reduce exposure or exit positions.

Additional Technical Indicators

The Know Sure Thing (KST) indicator aligns with the bearish outlook, showing negative momentum on both weekly and monthly charts. The Dow Theory assessment also remains mildly bearish across these timeframes, suggesting that the broader trend is still under pressure.

On-Balance Volume (OBV) analysis reveals no clear trend on the weekly chart, but a mildly bearish signal on the monthly scale. This divergence between volume and price action may indicate cautious selling rather than aggressive liquidation.

Comparative Performance and Market Context

Despite the recent technical deterioration, Supreme Industries Ltd has delivered strong long-term returns relative to the benchmark Sensex. Over the past 10 years, the stock has appreciated by 416.26%, significantly outperforming the Sensex’s 241.54% gain. Similarly, over five years, the stock’s return of 98.16% surpasses the Sensex’s 65.05%.

However, the short-term performance paints a more cautious picture. Year-to-date, Supreme Industries has marginally gained 0.08%, while the Sensex has declined by 3.57%. Over the past month, the stock’s return of -0.12% slightly outperforms the Sensex’s -3.24%, but the one-week return of -2.96% lags behind the Sensex’s -1.73%. The one-year return of -16.36% contrasts sharply with the Sensex’s positive 6.63%, underscoring recent challenges faced by the company and sector.

Mojo Score and Rating Revision

MarketsMOJO’s proprietary Mojo Score for Supreme Industries currently stands at 36.0, reflecting a Sell rating. This represents a downgrade from the previous Hold rating, effective from 23 October 2025. The Market Cap Grade remains low at 2, indicating limited market capitalisation strength relative to peers.

The downgrade is consistent with the technical indicators’ bearish signals and the stock’s recent price underperformance. Investors should note that the downgrade reflects a comprehensive assessment of price momentum, volume trends, and relative strength metrics.

Sector and Industry Considerations

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 evident in the stock’s wide 52-week price range.

Given the current technical weakness and sector challenges, investors may prefer to monitor the stock closely for signs of a technical reversal or improved volume support before considering new positions.

Outlook and Investor Implications

In summary, Supreme Industries Ltd is currently navigating a challenging technical landscape. The confluence of bearish MACD, moving averages, Bollinger Bands, and KST indicators across multiple timeframes suggests that the stock may continue to face downward pressure in the near term.

While the RSI and OBV indicators do not signal extreme oversold conditions, the absence of bullish momentum implies limited immediate upside. Investors should exercise caution and consider the broader market context, including sector dynamics and macroeconomic factors, before initiating or increasing exposure.

Long-term investors may find value in the stock’s historical outperformance relative to the Sensex, but the current technical signals warrant a more defensive stance. Monitoring for a shift in trend or confirmation of support levels near the 52-week low of ₹3,020.00 could provide clearer entry points.

Ultimately, the recent downgrade to a Sell rating by MarketsMOJO reflects a prudent assessment of the stock’s risk-reward profile amid prevailing technical headwinds.

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