Piramal Enterprises Tanks 12% to 52-Week Low; Is Support Near?

  • Stock Market Analysis

It has been a good day for the Indian markets, with the broader market index Nifty 50 rising 1.06% to 16,340  and the Sensex gaining 1.09% to 54,848.5, by 3:00 PM IST. However, investors of Piramal Enterprises (NS: PIRA ) are having a rough day today as the stock plunged over 12% to a new 52-week low of INR 1,632.7, owing to a sharp selling from the opening tick.

The reason behind the selling spree is the company’s Q4 FY22 earnings which didn’t seem to impress investors. The company reported a consolidated net profit of INR 150.53 crores and ended FY22 with a net profit of INR 1,998.77 crores as compared to FY21 profit of INR 1,412.86 crores. The company also announced a dividend of INR 33 per share, which would account for a total payout of INR 788 crores. 

Piramal Enterprises

Image Description: Weekly chart pf Piramal Enterprises, showing a support level

Image Source: Investing.com

After the results, intense selling pressure on the stock shocked investors, dragging the conglomerate’s shares to the lowest level since mid-May last year. Today’s selling has accelerated the existing bear run in the stock, as the stock has continuously been making lower lows, after it marked a 52-week high of INR 3,014.95 in October 2021. From the 52-week high, Piramal shares have crashed around 45% to the last traded price of INR 1,646.

The overall chart structure has only become worse as today’s fall has breached the nearest support level of INR 1,785 - INR 1,740. Another thing to note is that today’s volume has gone significantly up, registering a total number of over 4 million shares, which is the highest one-day volume since June last year. This significant increase in the volume figure is painting a gloomy picture for the stock. 

However, a relief for the bulls could come soon as there is a strong support level present almost immediately at INR 1,600 - INR 1,620 which could halt the downtrend for a while. 

After today’s fall, there has been a high addition of open interest (OI) in the 1,800 CE, at over 1,295 contracts, totalling an OI of 1,388 contracts at the strike price. This now makes the INR 1,800 level a strong resistance for the bulls, while on the charts, room for a counter-trend rally could be witnessed till the INR 2,000 level.

On the Put side, there has been a significant increase in the IVs (implied volatility) across the option chain. The options data is also conforming to the presence of immediate strong support, as 1,600 PE holds the highest OI, at around 685 contracts, with most of the OI (518 contracts) being added today.  

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  • Girish Shivaram @Girish Shivaram
    Hi AayushKindly provide overview and sentiment of Nifty
    Like 0

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