Why Technical Analysts Have Mixed Views On Ola Electric

Technical analysts have mixed views on Ola Electric Mobility as the stock has fallen almost 26% from its high of ₹157.40 on August 20.

What Happened: Ola’s shares have been on a downward spiral after its humungous run in the first week after its listing. On Monday the stock fell 2.54% after its market share in the EV segment fell to 31% at the end of August from 49% in the June quarter end.

Before the spiral, the stock had doubled from its listing price of ₹76 to a high of ₹157.

Technical Views: Jigar S Patel, senior manager – technical research analyst, Anand Rathi Shares and Stock Brokers said the stock’s fall from its high brought it to support levels.

“The sharp price drop brought the stock down to a crucial support level of ₹112-113, an area that coincides with its previous demand zone, indicating potential buying interest at these levels. Despite this decline, the recent trading session saw a violation of the bear trendline, which suggests a potential shift in market sentiment and presents a lucrative opportunity for investors,” he said.

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“Given the current technical setup, it is recommended to consider going long on Ola Electric within the range of ₹117-118, targeting an upside of ₹135, with a stop-loss set at ₹108 on a daily close basis. However, it is crucial to note that this buying strategy should only be triggered once OLAELEC successfully closes above ₹117 on a daily basis, ensuring that the breakout is confirmed and reducing the risk of a false signal.” Patel added.

Manish Shah, SEBI registered independent Market Analyst ( SEBI registered) said that short history of the stock might not be a huge sample size to do proper analysis. Nevertheless, Shah advice caution to investors as the short term trend for the stock is down.

“The price movement in last 10 days shows a declining trend on the hourly time frame. Seems initial euphoria since listing is now getting exhausted. Major support for the price is at 113-110. A break below 110 should take price down to below 80 in the weeks to come. For uptrend to resume price needs to reverse direction and move above 125. The short-term trend is down and the bias for the time-being is bearish,” he added.

Riyank Arora Technical Analyst at Mehta Equities on the other hand said, “Ola Electric is showing strong bullish momentum, supported by a well-defined buying zone between ₹110 to ₹120. The stock has a major support at ₹100, which serves as a crucial level for any downside risk. With an upside potential, targets are set at Rs 175 and Rs 200, indicating a promising growth trajectory. Investors are advised to consider entering within the buying zone for optimal returns.”

Price Action: Shares of Ola Electric were trading down 0.86% at ₹113.94 Tuesday afternoon.

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