Breakdown: F&O Stock Plunges Below Major Support, Heading ‘Much Lower’!
In Tuesday’s session, the Indian markets opened on a positive note as what the was indicating, however, it soon lost most of the gains and currently trading 0.18% up at 17,050, by 10:34 AM IST. But, a higher weakness is still visible in most of the counters which have fallen below their yesterday’s low.
Some stocks have just breached their major support levels which are seemingly becoming more lucrative for fresh positions. One such counter is PVR (NS:) which is going through a rough time, all thanks to back-to-back Bollywood duds. It is a small-cap theatre chain with a market capitalization of INR 10,610 crores.
The Covid-19 pandemic has changed the fate of the entire industry. The long-lasting effects of the pandemic are still visible in the company’s financials. The company has reported two-consecutive years of net loss, let alone rising to the pre-covid net profit figures. In fact, the combined loss of FY21 and FY22 stood at INR 1,236.03 crores which is almost twice the combined net profit in the preceding 7 years (from FY14 to FY20), at around INR 604.54 crores.
The confidence of FIIs is also declining which is evident in their actions. As of June 2021, FIIs held a stake of around 46.38% in PVR, which fell to 36.56% a year later, as of June 2022. Mutual fund interest has also decreased, from 18.19% to 17.94% in the same period.
Image Description: Daily chart of PVR with volume bars at the bottom
Image Source: Investing.com
As investors are now looking to exit the stock, the share price of PVR tumbled to the lowest level since March 2022. The stock is currently trading 1.1% down at INR 1,657 and made a low of INR 1,630.1 so far. The level of INR 1,650 is a very crucial zone for the stock. This is the level that has kept the stock from falling since March 2022, no matter how bad the rough patch for PVR materialized.
But, today, after a long time this important support zone seems to have been broken on an intraday basis. Meaning, despite falling below this level some investors are still willing to make a long bet which has resulted in the intraday recovery. Therefore, a closing below this level should be keenly watched before making any investment decision.
If this level gives up, then the stock could tank further to the level of INR 1,500 which is the next key support. The trend in the stock would accelerate if the broader market weakness continues to persist.
In Tuesday’s session, the Indian markets opened on a positive note as what the was indicating, however, it soon lost most of the gains and currently trading 0.18% up at 17,050, by 10:34 AM IST. But, a higher weakness is still visible in most of the counters which have fallen below their yesterday’s low.
Some stocks have just breached their major support levels which are seemingly becoming more lucrative for fresh positions. One such counter is PVR (NS:) which is going through a rough time, all thanks to back-to-back Bollywood duds. It is a small-cap theatre chain with a market capitalization of INR 10,610 crores.
The Covid-19 pandemic has changed the fate of the entire industry. The long-lasting effects of the pandemic are still visible in the company’s financials. The company has reported two-consecutive years of net loss, let alone rising to the pre-covid net profit figures. In fact, the combined loss of FY21 and FY22 stood at INR 1,236.03 crores which is almost twice the combined net profit in the preceding 7 years (from FY14 to FY20), at around INR 604.54 crores.
The confidence of FIIs is also declining which is evident in their actions. As of June 2021, FIIs held a stake of around 46.38% in PVR, which fell to 36.56% a year later, as of June 2022. Mutual fund interest has also decreased, from 18.19% to 17.94% in the same period.
Image Description: Daily chart of PVR with volume bars at the bottom
Image Source: Investing.com
As investors are now looking to exit the stock, the share price of PVR tumbled to the lowest level since March 2022. The stock is currently trading 1.1% down at INR 1,657 and made a low of INR 1,630.1 so far. The level of INR 1,650 is a very crucial zone for the stock. This is the level that has kept the stock from falling since March 2022, no matter how bad the rough patch for PVR materialized.
But, today, after a long time this important support zone seems to have been broken on an intraday basis. Meaning, despite falling below this level some investors are still willing to make a long bet which has resulted in the intraday recovery. Therefore, a closing below this level should be keenly watched before making any investment decision.
If this level gives up, then the stock could tank further to the level of INR 1,500 which is the next key support. The trend in the stock would accelerate if the broader market weakness continues to persist.