Stocks to Watch – Phoenix Mills – What technical charts, valuations speak of share after scrip takes a drubbing

The Phoenix Mills Limited shares took a drubbing on Tuesday even as most of its Nifty Realty peers ended Tuesday in the green and the overall markets also settled positively. The BSE Sensex closed at 56,319.01, up by 497 points or almost 0.9 per cent. While, the NSE Realty index ended at 459.95, Nifty50 closed at 16,770.85, up 0.9 per cent from the previous closing.  

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At least three analysts recommend a wait and watch strategy in this stock and advised against making any fresh entry in this counter.

The stock today hit an intraday low of Rs 950 per share, which remains a crucial level for it, technical analyst Simi Bhaumik said. A breach lower than this could unsettle the applecart, she added. The downside will open for levels between Rs 890 and Rs 900, which is a strong support zone, she said. A further slide will damage the prospects of this counter, she warned.

The chart still looks positive for Phoenix Mills shares and its trajectory on Wednesday could be a key determinant of where the price movement is headed. If the Rs 950-level holds, chances of further uptick increase.

The shares of Phoenix Mills managed to close above Rs 1000, its 100-DEMA (Double Exponential Moving Average). The stock ended at Rs 958.30 on the BSE, correcting by Rs 68 or over 6 per cent.  

Meanwhile, technical analyst Nilesh Jain sees current chart patterns not very supportive. A head and shoulder pattern formation suggests that the situation could become even worse if it slips below Rs 940-930, which is seen as a strong support zone. His suggestion is to avoid this stock.  

A bounce back is expected if the market situation improves for levels between Rs 1100 and Rs 1200, he said. Existing investors must hold this stock with a stop loss at Rs 930, he added.

Jain is Assistant Vice President (AVP), Equity Research Technical and Derivatives at Centrum Broking.

The stock still has its fundamentals in place with excellent management, Sandeep Jain, Director at Tradeswift said. While the stock has corrected from the highs of Rs 1199, the valuations remain “very” high, Jain said. The right levels to enter this stock is Rs 800-850. A 10-15 per cent correction is required before making a fresh move.  

The broader markets are riskier and not worth a buy at current levels since the upside will be limited even if it goes up from here, he said.  It is a buy on decline candidate, said Jain. He remained bullish on the real estate sector.

(Disclaimer: The views/suggestions/advices expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)