Why is Nuvama Wealth falling/rising?

As of 18-Jul, Nuvama Wealth Management Ltd is experiencing a decline in its stock price, currently at 7,722.40, reflecting a decrease of 92.6 points or 1.18%. Despite this recent drop, the stock has shown strong performance over the past week, gaining 5.40%, and has outperformed the benchmark Sensex, which fell by 0.90%. However, today's performance indicates a reversal after four consecutive days of gains, with the stock underperforming its sector by 0.89%. The stock is trading above its moving averages across various time frames, and there has been a significant increase in investor participation, with delivery volume rising by 184.39% compared to the five-day average. The company's strong fundamentals, including a high return on equity and consistent profit growth, support its long-term value, but the high valuation and the fact that 62.8% of promoter shares are pledged pose risks that could pressure the stock price.
In the broader market context, while Nuvama Wealth has generated a remarkable return of 58.07% over the past year, the BSE500 index has only managed a slight negative return of -0.36%. This indicates that Nuvama has been able to significantly outperform the market, contributing to its strong year-to-date return of 11.50%. However, the recent decline in stock price may reflect market volatility and investor sentiment influenced by the high percentage of pledged shares, which can exacerbate price movements in a falling market. Overall, while the stock has shown resilience and strong fundamentals, the current price drop suggests a cautious approach from investors amid potential risks.