JM Financial shares plunge 10%; what's next for this battered stock on tech charts?

Shares of JM Financial Ltd tanked 10.34 per cent in Monday's trade to hit a day low of Rs 78.85. At this price, the stock has plummeted 31.41 per cent from its one-year high value of Rs 114.95, a level seen earlier this year on January 29. The recent downward move in the share price can be attributed to restrictions imposed by market regulator Sebi and the central bank.

Securities and Exchange Board of India (Sebi) barred JM Financial from taking new mandates this week, saying it had found that funds from connected entities were used to inflate subscriptions and provide an assured exit to investors.

The merchant bank, in a stock exchange filing, said that it will fully cooperate with the capital market regulator in its investigations.

Reserve Bank of India (RBI), meanwhile, has told JM Financial's non-banking unit to stop any form of financing against shares and debentures, including loans to customers to subscribe to initial public offerings (IPOs).

On technical setup, support on the counter could be seen around the Rs 70-65 zone.

Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, "Support will be at Rs 75 and resistance at Rs 85. A decisive close above Rs 85 level may trigger a further upside till Rs 90. Expected trading range will be between Rs 70 and Rs 95 for a month."

AR Ramachandran from Tips2trades said, "JM Financial is bearish but also oversold on daily charts with strong resistance at Rs 88. Investors should buy only if a daily close is above the mentioned resistance level for a target of Rs 103 in the near term. Strong support will be at Rs 67."

DRS Finvest founder Ravi Singh said, "The stock looked weak on daily charts and may slip towards Rs 65 level. Resistance will be at Rs 88."

The counter was trading lower than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-day and 200-day simple moving averages (SMAs). The counter's 14-day relative strength index (RSI) came at 25.04. A level below 30 is defined as oversold while a value above 70 is considered overbought.

The company's stock has a price-to-equity (P/E) ratio of 27.80 against a price-to-book (P/B) value of 2.10. Earnings per share (EPS) came at 3.16 with a return on equity (RoE) of 7.57.

As of December 2023, promoters held a 56.44 per cent stake in the company.