Jio Financial Services Ltd (JFS) may still be in for a rough ride, according to a cautious assessment by Nilesh Jain, VP-Head of Technical and Derivative research at Centrum Finverse. Jain suggests the stock is currently under significant selling pressure and could slide further towards the Rs 200-Rs 190 range before any substantial recovery.
Technical Indicators Point to Weakness
Responding to investor queries, Jain highlighted that JFS has struggled to regain upward momentum. The stock has recently encountered resistance at its 21-day short-term moving average and is trading below all its key short-term and long-term moving averages. This indicates both weak near-term sentiment and a broader downtrend.
On weekly charts, the technical structure for JFS is also concerning. Jain pointed to a consistent “lower top and lower bottom” formation, a pattern typically signaling a persistent downtrend and suggesting the stock has not yet found its floor.
Further Downside Expected Before Stability
Given the current technical setup, Jain believes further weakness is likely in the short to medium term, with the stock potentially heading towards the Rs 200 to Rs 190 mark. This outlook may disappoint investors who had anticipated a rapid post-listing rerating for the financial services arm of Reliance Industries.
In a fragile broader market, even fundamentally strong names can remain under pressure if technical structures deteriorate and robust buying support is absent.
Potential Value Buying Zone Identified
Despite the bearish short-term outlook, Jain did offer a glimmer of hope for long-term investors. He suggested that from a one-year-plus perspective, the Rs 180-Rs 190 zone could emerge as a strong support area, potentially attracting value buying. However, he cautioned that investors with a longer horizon would require patience.
“Purely from a short-term trading perspective, I believe there may be further weakness,” Jain reiterated, emphasizing the immediate challenges for JFS.
The broader market sentiment, characterized by a weak Nifty structure where pullbacks are sold into and volatility remains high, further compounds the pressure on stocks like JFS that are already in a downtrend. A sustained rebound for Jio Financial Services may only occur once stronger support levels are firmly tested and consistent buying interest returns.