Zomato shares slip 5% today; can stock revisit one-year high level?

Shares of online food aggregator Zomato Ltd resumed fall in Wednesday's trade after a single-day halt. The stock dived 5.13 per cent to hit a day low price of Rs 126.70. At this price, the scrip has fallen 10.49 per cent from its one-year high of Rs 141.55, a level seen during last Friday's trading session. Despite the mentioned drop, the multibagger counter has zoomed 185.68 per cent from its 52-week low price of Rs 44.35, hit on January 25 last year.

On technical setup, support on the counter could be seen in the Rs 120-110 zone. In contrast, immediate resistance is likely to be found above Rs 135 level. And, a decisive breach above the said level is required for a further upside.

Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One, said, "Zomato is in a secular uptrend, hovering in the cycle of higher highs – higher lows. The stock is likely to have in-between blips, but till it sustains above the Rs 120-115-odd zone (coinciding with 50-DEMA), there should not be any caution. On the higher end, the Rs 135-140 zone is likely to act as an immediate hurdle and a decisive surge could only trigger the next round of rally."

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AR Ramachandran from Tips2trades said, "Zomato is bearish on daily charts with strong resistance at Rs 135. A daily close below support of Rs 125 could lead to target of Rs 112 in the near term."

DRS Finvest founder Ravi Singh said, "The stock is looking weak and may slip towards Rs 110 level. Immediate resistance will be at the Rs 135 zone."

The counter was trading lower than the 5-day, 10-, 20-day simple moving averages (SMAs) but higher than the 30-day, 50-, 100-, 150-day and 200-day SMAs. The 14-day relative strength index (RSI) came at 47.80. A level below 30 is defined as oversold while a value above 70 is considered overbought.

The company's stock has a price-to-equity (P/E) ratio of 139.44 against a price-to-book (P/B) value of 5.38.

That said, brokerage HSBC has suggested a 'Buy' call for Zomato with a target price of Rs 150. "After an extremely strong 2023, we expect relatively muted business and stock performance in 2024. Still, our long-term view remains constructive," the Hong Kong-based brokerage said.

(Disclaimer: Business Today provides stock market news for informational purposes only and that should not be construed as investment advice. Readers are encouraged to consult a qualified financial advisor before making any investment decisions.)

 

 

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