Why is First Custodian falling/rising?

Intraday Price Movement and Volatility

The stock opened with a gap down of 4.11%, setting a negative tone for the trading session. Throughout the day, First Custodian experienced heightened volatility, with an intraday price range of ₹10.29 and a volatility measure of 6.2%. The share price touched an intraday low of ₹77.7, representing a 12.34% decline from previous levels. Notably, the weighted average price indicates that a larger volume of shares traded closer to the day’s low, suggesting selling pressure dominated the session.

Technical Indicators and Moving Averages

From a technical perspective, First Custodian is trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages. This consistent positioning beneath critical technical support levels often signals bearish momentum and may deter short-term traders and investors from entering or holding positions. The recent trend reversal after two consecutive days of gains further emphasises the weakening price action.

Comparative Performance Against Benchmarks

Examining the stock’s returns relative to the Sensex reveals a stark contrast. Over the past week, First Custodian’s shares have declined by 13.90%, while the Sensex has remained nearly flat with a marginal loss of 0.53%. The one-month performance shows a 7.29% drop for the stock against a 2.16% gain in the benchmark. Year-to-date, the stock has plummeted by 46.97%, whereas the Sensex has appreciated by 9.12%. Even over a one-year horizon, First Custodian’s shares have fallen by 31.39%, contrasting with the Sensex’s 5.32% rise. These figures highlight the stock’s persistent underperformance and suggest sector-specific or company-specific challenges weighing on investor confidence.

Liquidity and Investor Participation

Investor participation appears to be waning, as evidenced by a dramatic 98.89% decline in delivery volume on 03 Dec compared to the five-day average. This sharp drop in delivery volume indicates reduced long-term investor interest or conviction, which can exacerbate price declines. Despite this, the stock maintains sufficient liquidity, with trading volumes adequate to support sizeable transactions without excessive price impact. However, the current trend of falling participation combined with high volatility may discourage new buyers from entering the market.

Summary of Factors Driving the Decline

The sharp fall in First Custodian’s share price on 04-Dec can be attributed to a combination of factors. The stock’s underperformance relative to the Sensex and its sector, coupled with a gap down opening and intraday volatility, points to negative market sentiment. Technical weakness, as demonstrated by trading below all major moving averages, further compounds bearish outlooks. Additionally, the significant drop in delivery volume suggests diminishing investor confidence and participation, which often leads to accelerated price declines. While the stock has delivered strong returns over the longer term—posting gains of over 100% in three years and nearly 150% in five years—its recent performance indicates a challenging environment that investors should monitor closely.

Outlook for Investors

Given the current technical and volume trends, investors may want to exercise caution with First Custodian shares. The stock’s persistent underperformance against benchmarks and falling investor participation could signal further downside risk in the near term. Monitoring upcoming market developments and sector dynamics will be crucial for assessing any potential recovery. Meanwhile, investors seeking exposure to the NBFC space might consider evaluating alternative options that offer stronger momentum or more favourable fundamentals.

Limited Time Only! Subscribe for Rs. 12,999 and get 1 Year of MojoOne + an Additional Year Completely FREE. Don't miss out on this exclusive offer. Claim Your Free Year →