Asian Paints and Berger Paints lose ground as they find a new competitor!
![Trending stocks Trending stocks](https://storage.googleapis.com/5paisa-prod-storage/files/2022-05/nifty_6.jpg)
![resr resr](https://storage.googleapis.com/5paisa-prod-storage/files/2022-01/author.png)
Last Updated: 13th December 2022 - 10:26 am
Shares of Asian Paints and Berger Paints dropped about 8.06% and 7.21% respectively, after their new rival Grasim, doubles its capex plan for entering the paints sector.
Grasim announced that it shall be doubling the capital expenditure for its foray into the paints business to Rs 10,000 crore. The company expects to start production from the fourth quarter of 2023-24 (FY24). Thus, the paint sector stocks have taken a hit and most of them fell over 5% on Wednesday.
Asian Paints, which was holding on to its support of Rs 3000, plunged sharply below it and closed at 2839. It is currently about 12% below its 200-DMA while the 14-period daily RSI (35.77) has slipped into bearish territory. The volume recorded today was above average, indicating a severe profit booking in the stock. All the technical oscillators have taken a dip. The daily MACD has indicated a bearish crossover and the overall sentiment is bearish. The next key support lies at Rs 2600, where the stock is expected to see buying interest.
The case with Berger Paints is even worse. The stock plunged below its key support level of Rs 600 and closed at Rs 568.50. It is below all its key moving average and all the moving averages indicate bearishness. The ADX at 29.71 indicates a strong downtrend while the 14-period daily RSI plunged into oversold territory. The KST and TSI indicators, too, maintain a bearish view.
On analyzing the technical charts, the weakness is expected to persist in both stocks. However, a technical bounce is a possibility. Investors willing to hold these stocks for the long term shall wait for base formation before accumulating. The companies hold a strong presence in the paints sector and have strong fundamental ratios. In the case of traders, the stocks are expected to provide several trading opportunities in times to come.
Trending on 5paisa
Discover more of what matters to you.
Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing. For detailed disclaimer please Click here.