Why is Nakoda Group of Industries Ltd falling/rising?

Recent Price Movement and Market Comparison

The stock’s fall on 20-Jan was marked by a decrease of ₹1.18, or 4.15%, closing well below its intraday high of ₹29.5, which had seen a modest 3.65% gain earlier in the session. The intraday low touched ₹27.2, indicating significant downward pressure as the day progressed. Notably, the weighted average price suggests that a larger volume of shares traded closer to the day’s low, underscoring selling momentum.

When compared to the broader market, Nakoda Group’s performance has been considerably weaker. Over the past week, the stock has declined by 5.93%, far exceeding the Sensex’s modest 1.73% drop. This underperformance extends over longer periods as well, with a one-month loss of 7.12% against the Sensex’s 3.24% decline, and a year-to-date drop of 10.73% compared to the benchmark’s 3.57% fall. Over the past year, the stock has suffered a steep 30.94% loss, while the Sensex has gained 6.63%. Even over three and five years, Nakoda Group’s returns lag significantly behind the Sensex, highlighting persistent challenges.

Technical Indicators and Investor Participation

Technically, Nakoda Group is trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages. This consistent positioning below moving averages typically signals a bearish trend and may deter short-term investors. Furthermore, investor participation appears to be waning, as evidenced by a sharp 42.05% decline in delivery volume on 19-Jan compared to the five-day average. Lower delivery volumes often indicate reduced conviction among investors, which can exacerbate price declines.

Liquidity remains adequate for trading, with the stock’s turnover supporting reasonable trade sizes. However, the combination of falling prices, weak relative performance, and declining investor interest suggests that market sentiment towards Nakoda Group is currently subdued.

Long-Term Performance Context

Looking at the longer-term horizon, Nakoda Group’s stock has underperformed significantly against the Sensex. While the benchmark index has delivered a 65.05% gain over five years, the stock’s appreciation stands at 41.42%, indicating it has not kept pace with broader market growth. Over three years, the divergence is even starker, with the stock losing 56.87% compared to the Sensex’s 35.56% gain. This persistent underperformance may reflect company-specific challenges or sectoral headwinds that have weighed on investor confidence.

Conclusion: Why Nakoda Group Shares Are Falling

The decline in Nakoda Group of Industries Ltd’s share price on 20-Jan is a reflection of sustained underperformance relative to the Sensex and sector benchmarks, combined with technical weakness and reduced investor participation. The stock’s position below all major moving averages signals a bearish trend, while the significant drop in delivery volumes suggests waning investor conviction. Despite adequate liquidity, these factors collectively contribute to the downward pressure on the stock.

Investors should weigh these indicators carefully, considering the stock’s historical underperformance and current market dynamics before making investment decisions. Monitoring future trading volumes, price action relative to moving averages, and any fundamental developments will be crucial in assessing whether the stock can stabilise or reverse its downward trajectory.

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 →