Why is NTC Industries falling/rising?

Recent Price Movement and Market Performance

NTC Industries has been on a downward trajectory, with the stock falling by 2.68% over the past week compared to a modest 0.40% decline in the Sensex. The one-month performance is even more stark, with the stock shedding nearly 10% of its value, while the Sensex remained relatively flat, declining just 0.23%. Year-to-date, the stock has plunged 33.33%, in sharp contrast to the Sensex's gain of 8.12%. Over the last twelve months, the stock has declined by 39.35%, whereas the Sensex has appreciated by 5.36%. These figures highlight a significant underperformance relative to the benchmark index, signalling persistent challenges for NTC Industries.

Despite this recent weakness, it is worth noting that the stock has delivered strong returns over the longer term, with gains of 77.37% over three years and an impressive 220.66% over five years, outperforming the Sensex’s respective returns of 37.73% and 79.90%. This suggests that while the current phase is difficult, the company has demonstrated resilience and growth potential in the past.

Intraday Trading Dynamics and Technical Indicators

On 18-Dec, NTC Industries opened with a gap down of 2.31%, setting a negative tone for the trading session. The stock touched an intraday low of ₹151, representing a 5.63% decline from previous levels, and closed just 3.85% above its 52-week low of ₹150. This proximity to the annual low underscores the stock’s vulnerability and the prevailing bearish sentiment among investors.

Technical analysis reveals that the stock is trading below all major moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages. This alignment of moving averages below the current price is a classic indicator of sustained downward momentum, often discouraging short-term traders and signalling caution to longer-term investors.

Further compounding the negative outlook is the weighted average price data, which shows that a greater volume of shares traded closer to the day’s low price. This suggests selling pressure dominated the session, with buyers reluctant to step in at higher levels.

Declining Investor Participation and Liquidity Considerations

Investor participation appears to be waning, as evidenced by a sharp 51.78% drop in delivery volume on 17 Dec compared to the five-day average. Lower delivery volumes typically indicate reduced conviction among investors, with fewer shares being held for the longer term. This decline in participation can exacerbate price declines, as selling pressure is not met with adequate buying support.

Despite these challenges, the stock remains sufficiently liquid for trading, with average traded value supporting reasonable trade sizes. However, liquidity alone has not been enough to arrest the recent slide in prices.

Summary and Investor Takeaways

The decline in NTC Industries’ share price on 18-Dec is part of a broader pattern of underperformance relative to the Sensex and its sector. The stock’s proximity to its 52-week low, combined with negative technical signals and falling investor participation, suggests that market sentiment remains subdued. The persistent downward momentum over the past month and year highlights ongoing challenges that investors should carefully consider.

While the company’s long-term track record shows robust gains, the current environment calls for caution. Investors may wish to monitor key support levels closely and watch for signs of stabilisation before considering fresh positions. Those seeking alternatives might benefit from comparative analyses that evaluate fundamentals and momentum across similar microcap FMCG stocks.

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 →