The stock of Jio Financial Services advanced more than 14% to touch a lifetime high of Rs 347 on the National Stock Exchange on February 23. The company’s total market capital crossed the milestone of Rs 2 lakh crore.
In the last five days, the stock has given a return of almost 24% and over 41% in the past month.
The benchmark index Nifty 50 has risen 0.75% in the last five days and 4.7% in the last 30 trading sessions.
“Jio Financial is bullish but also very overbought on the Daily charts with the next resistance at 360. Investors should book profits at current levels as the Daily close below the support of 305 could lead to the target of 255 in the near term,” said A R Ramachandran, co-owner of Tips2trades.
The company has gained around 25% this week and trading at its record high as well. It may take a breather after the recent surge but the tone is likely to remain positive, said Ajit Mishra, senior vice president of technical research at Religare Broking.
“Short-term traders can continue to hold their existing positions, with stop loss at 320 levels. While long-term investors shouldn’t worry much about the short-term fluctuations and focus on earnings for cues,” said Mishra.
According to Sonam Srivastava, founder and fund manager at Wright Research, the upsurge in the prices of the company has several factors into play. Firstly, strong financial performance and consistent revenue growth have instilled confidence among investors, driving demand for the stock. Secondly, the company’s aggressive expansion plans, particularly in digital financial services, have positioned it favorably amidst India’s rapidly growing digital economy. Lastly, the backing of Reliance Jio provides financial resources and a large customer base, further bolstering investor sentiment.
“In the short term, Jio Financials’ stock price may experience some volatility due to market fluctuations and profit booking. However, the company’s strong fundamentals and growth potential suggest a cautiously optimistic outlook. As for the long term, Jio Financials is well-positioned to capitalize on the growing digital financial services market in India, potentially leading to sustained growth and increased shareholder value over time,” said Srivastava.
“For retail investors, a prudent strategy would involve conducting thorough due diligence before investing, considering factors such as the company’s financial health, expansion plans, and market conditions. Diversification across different sectors and asset classes can help mitigate risk, while a focus on the long-term growth potential of Jio Financials may yield favorable returns. It’s essential to assess one’s risk tolerance and investment goals and avoid being swayed by short-term market movements,” added Srivastava.
