Multibagger Olectra Greentech shares dive 21% in 7 days; time to buy, sell or hold?

Shares of Olectra Greentech Ltd fell sharply on Tuesday trade, extending their fall for the seventh straight session. The stock tanked 8.95 per cent to settle at Rs 1,082.40 over its previous close of Rs 1,188.75. The counter has cracked 21.14 per cent in seven days. At today's closing price of Rs 1,082.40, the stock was down 26.12 per cent from its 52-week high of Rs 1,465, a level seen on July 13, 2023. On the other hand, the multibagger scrip has zoomed 189.14 per cent from its one-year low price of Rs 374.35, hit on February 23 this year. It has gained 108.94 per cent in 2023 so far.

The spike in the share price came on account of bagging multiple orders to manufacture electric buses. Currently, the stock is witnessing profit booking.

Bourses BSE and NSE have put the securities of Olectra Greentech under the long-term ASM (Additional Surveillance Measure) framework. Exchanges put stocks in short-term or long-term ASM frameworks to caution investors about high volatility in share prices.

On technical setup, support level could be seen around Rs 1,000 and the stock may witness more selling pressure in the coming days.

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Ravi Singh, Vice-President and Head of Research at Share India, said, "Olectra Greentech is witnessing profit booking. The technical parameters are suggesting some more weakness in coming trading sessions."

AR Ramachandran from Tips2trades said, "Olectra Greentech is bearish on the daily charts with strong resistance at Rs 1,271. It may slip to Rs 1,000 in the near term."

VLA Ambala, Research Analyst at Stock Market Today, said, "The stock is looking overbought but has still the potential to grow more. For a fresh long position, wait for the price to confirm its new support range which could be nearly Rs 1,000-950. I would say be patient and wait for the right time to enter it again."

The stock was last seen trading higher than the 50-day, 100- and 200-day moving averages but lower than the 5-day and-20 day moving averages. The counter's 14-day relative strength index (RSI) came at 45.67. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-earnings (P/E) ratio of 138 against a price-to-book (P/B) value of 11.50.

The scrip has an average target price of Rs 738, Trendlyne data showed, suggesting a potential downside of 32 per cent. It has a one-year beta of 0.35, indicating low volatility on the counter.

The company is a subsidiary of Megha Engineering and Infrastructures Ltd (MEIL) and manufactures electric buses in India. Olectra is also India's largest silicone rubber/composite insulators manufacturer for power transmission and distribution networks.

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