Why is Veejay Lak. Eng. falling/rising?

Intraday Volatility and Trading Dynamics

The stock experienced significant price fluctuations throughout the day, opening with a gap down of 7.31%, hitting an intraday low of ₹46.30, before recovering to touch a high of ₹52, representing a 4.1% gain from the previous close. This wide trading range of ₹5.7 and an intraday volatility of 5.8% underscore the stock’s erratic behaviour on 22-Dec. Despite the initial bearish sentiment at the open, buyers stepped in, pushing the price higher and enabling the stock to outperform its sector by 3.76% during the session.

Short-Term Momentum and Moving Averages

Veejay Lakshmi Engineering Works has been on a positive trajectory over the last two days, delivering a cumulative return of 5.64%. The current price stands above the 5-day and 20-day moving averages, signalling short-term bullish momentum. However, it remains below the longer-term 50-day, 100-day, and 200-day moving averages, indicating that the stock is still in a broader downtrend and has yet to regain sustained upward strength over the medium to long term.

Comparative Performance and Historical Context

Over the past week and month, the stock has outperformed the Sensex benchmark, gaining 3.00% and 6.14% respectively, compared to the Sensex’s modest 0.42% and 0.39% returns. This relative strength suggests renewed investor interest in the stock despite its challenging year-to-date performance, which remains deeply negative at -42.10%. Over the last year, the stock has declined by 24.26%, contrasting with the Sensex’s 9.64% gain, highlighting the company’s struggles amid broader market gains. However, the five-year return of 93.97% surpasses the Sensex’s 85.99%, indicating that long-term investors have been rewarded despite recent setbacks.

Liquidity and Investor Participation

Liquidity conditions appear adequate for trading, with the stock’s volume supporting reasonable trade sizes. Nonetheless, investor participation has waned recently, as evidenced by a sharp 67.89% decline in delivery volume on 19-Dec compared to the five-day average. This drop in delivery volume may reflect cautiousness among long-term holders or a temporary reduction in conviction, which could contribute to the stock’s price volatility and erratic trading patterns.

Conclusion: A Tentative Recovery Amid Lingering Challenges

The rise in Veejay Lakshmi Engineering Works’ share price on 22-Dec reflects a short-term recovery driven by intraday buying interest and relative outperformance against sector peers. However, the stock’s persistent year-to-date losses and position below key long-term moving averages suggest that investors remain cautious about its medium-term prospects. The high volatility and reduced delivery volumes further indicate that while momentum has improved recently, sustained investor confidence has yet to fully materialise. Market participants should weigh these factors carefully when considering exposure to this microcap, balancing the potential for short-term gains against the backdrop of ongoing uncertainty.

Get 2 full years of MojoOne Premium for only Rs. 12,999. Subscribe for 1 year and we'll add another year FREE. Offer valid for a limited time. Start Saving Now →