2 Nifty Stocks Make New 52-Week Lows! A Sign of Worry?

  • Stock Market Analysis
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Yesterday was one of the best sessions for the Indian markets with investors going on a buying spree across the board. Weak stocks, especially commodity-based companies have also had a strong session. However, today seems to be a completely opposite day with the Nifty 50 index falling 1.35% to 15,430 and the Sensex tanking 1.18% to 51,909, by 1:10 PM IST.

While the Nifty 50 index has not breached its previous low of 15,183.4 yet, two of its constituents have fallen to a new 52-week low today. These stocks include Axis Bank (NS: AXBK ) and UPL (NS: UPLL ). Let us have a look at the technical outlook of both of them.

Axis Bank

The share price of Axis Bank fell 1.4% to the current price of INR 627.6, recovering a bit from the day’s low of INR 621.25, which is a new 52-week low as well. Axis Bank shares are currently hovering around a make-or-break level of major support of INR 625 - INR 626. This is the lowest point since January 2021. Although these levels have been tested today, a recovery from the day’s low indicates decent demand kicking in around these levels. 

Axis Bank chart

Image Description: Weekly chart of Axis Bank 

Image Source: Investing.com

However, a closing below this level could mean an acceleration of the current fall. The stock is comfortably trading below its 21-week moving average which also depicts a negative trend for the medium term. Below the current support, the stock could see a straight plunge to INR 592 - INR 590 levels.

UPL Limited

The shares of UPL have also tanked to a new 52-week low of INR 612.05 today. The stock is currently down by 6.07% to 614.7. Unlike Axis Bank, the share price of UPL has already breached its make-or-break level of INR 622 and is comfortable trading below it. If the stock closes at this level, then bulls might need to run for cover.

UPL chart

Image Description: Weekly chart of UPL 

Image Source: Investing.com

The last three weekly candles have shown the strength of this sell-off with the share price of UPL losing over 4.5%, 9.4% and 7.7% (as of Wednesday) in the three consecutive weeks. Below the current support of INR 622, the next support comes at around INR 581 - INR 580. 

So will this fall affect Nifty’s direction? 

Being a constituent of the Nifty 50 index, the broader direction of the Nifty would somehow be affected, However, Axis bank holds a weightage of nearly 2.77% in the index while UPL holds a minuscule 0.5% weightage, therefore a major drag on the Nifty 50 should not be expected.

However, heavyweights such as Reliance (NS: RELI ) (13.03% weightage) and HDFC (NS: HDFC ) twins holding a combined weightage of around 14.76% would have a higher impact on the index. While Reliance is correcting from the high, HDFC twins are looking to recover from the lows, which would probably make it difficult for the Nifty to catch a one-sided trend soon.

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