Asian Paints Slips Into Oversold Zone: SEBI Analyst Urges Caution For New Investors

Asian Paints has been in a short-term downtrend, losing 7% over the past month. Technicals suggest further weakness, but fundamentally, it remains a strong bet despite near-term earnings pressure and margin strain. 

From a trading perspective, SEBI-registered analyst Anupam Bajpai advised investors to wait for a bullish candlestick formation on the daily chart before entering the stock.

Fundamental View

Asian Paints has long been India's market leader in the paints and coatings industry, backed by a strong balance sheet, wide distribution network, and steady growth over decades. 

The company's history of high returns on capital and minimal debt has earned it investor confidence and a consistently premium market valuation.

Bajpai said that while the company's fundamentals remain strong, the recent quarters have seen some softness in performance. 

Earnings have slipped, margins are under pressure, and with a price-to-earnings ratio above 60, the stock now appears expensive compared to its historical growth levels.

Technical View

From a technical standpoint, Bajpai noted that Asian Paints' stock has dropped below its lower Bollinger Band, indicating heavy selling pressure. 

The Relative Strength Index (RSI) has slipped into oversold territory, indicating that the stock has fallen sharply and may be due for a pause or a bounce.

Bajpai said the short-term trend remains weak, with the 20-day and 50-day moving averages now acting as barriers to any quick recovery. However, the longer-term averages, the 100-day and 200-day, are still providing support and helping to hold the stock steady.

He observed that short-term traders could read the cracks, but long-term investors could be supported by the fundamentals. 

Bajpai added that oversold conditions could result in a short-term rebound, but a breach of the 200-day support level could pave the way for further downside.

Analyst Outlook

Bajpai described Asian Paints as“a market leader caught in a short-term storm.” He said the stock's“colours look faded on the chart, but the canvas remains strong,” suggesting that the underlying business continues to hold firm despite near-term volatility.

He advised investors to wait for a bullish candlestick formation on the daily chart before taking any fresh positions in the stock.

What Is The Retail Mood?

On Stocktwits, retail sentiment for Asian Paints was 'neutral' amid 'normal' message volume.

Asian Paints' stock has risen 2.1% so far in 2025.

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