Street Signs: Stocks in overbought territory, PVR shares flat, and more

Stocks enter ‘overbought’ territory

The benchmark Nifty rose 4.2 per cent to end at 16,719 last week — its best weekly advance in 17 months. Following the sharp upmove, stocks have reached ‘overbought’ territory, which calls for some profit-taking, say analysts. “The momentum readings on the lower time chart have reached the overbought zone. Generally such set-ups lead to either a price-wise or a time-wise correction. Also, market participants will be eyeing the corporate results of some heavyweights, the US Federal Reserve meeting outcome, and the monthly expiry effect,” says Ruchit Jain, lead research, 5Paisa. Markets are expected to remain volatile on opening as they absorb the results of Reliance Industries and Infosys. At upper levels, 17,000 is a key resistance, while on the downside, immediate support is around 16,590. If broken, the Nifty could drop towards 16,490-16,360.

Also Read : PVR reports Rs 53 cr net profit in Q1; revenue zooms multi-fold on low base

Curtains lift on PVR: Multiplex chain sees long build-up

Shares of PVR remained flat last week, even as the market rose 4 per cent. However, the counter is exhibiting some bullishness, according to quantitative analysts. The stock has seen high delivery-based buying and long build-up. Last week, the multiplex operator reported its best-ever quarterly performance. During the June quarter, PVR clocked revenues of Rs 1,000 crore and an operating profit of Rs 208 crore. Footfalls at cinemas are not back to pre-pandemic levels yet. However, it is only a matter of time with an exciting movie calendar ahead. Titles such as Aamir Khan’s Laal Singh Chaddha and Ranbir Kapoor’s Brahmastra are due for release during the September quarter. Analysts expect the strong momentum in PVR to continue.

Out of the woods: Price hikes to aid wood panel makers

Shares of companies producing wood panels are expected to register good performance on the back of sector tailwinds and price hikes. Analysts say there is strong demand for medium-density fibreboard due to strong demand from original equipment manufacturers and the retail sector. Moreover, smaller and unorganised players continue to face pressure on raw material cost inflation, logistics, demand volatility, and working capital. These will likely aid market-share gains for larger players in the near term, observe analysts. Greenpanel Industries and Century Plyboards (India) are seen benefiting.
 

Contributed by Sundar Sethuraman