Ola Electric shares crash 70% in a year; should you catch the falling knife?

Shares of Ola Electric Mobility continued their decline on Thursday, dropping by 5.5% during the session and reaching a new low of Rs 31.11. The ongoing fall comes amid market speculation regarding founder and promoter Bhavish Aggarwal’s recent stake sales in the company, which have significantly impacted investor confidence.

Aggarwal offloaded 4.2 crore shares on Wednesday, following the sale of 2.6 crore shares on Tuesday. The company stated that these transactions, valued at Rs 234 crore in total, were conducted to fully repay a promoter-level loan of Rs 260 crore. This move comes at a time when Ola Electric’s share price is down 60% from its IPO price of Rs 76, which was launched in August 2024.

The stock has dropped nearly 70% from its 52-week high of Rs 99.90, reached on 26 December 2024, and has crashed as much as 80% from its all-time peak of Rs 157, shortly after its market debut. Ola Electric’s market capitalisation has plummeted to Rs 13,725 crore from a peak of around Rs 69,250 crore, wiping out over Rs 55,520 crore in investor wealth.

Technical analysts believe that Ola Electric is a clear avoid for now as the technical setup is signalling weak sentiments amid limited buying interest. They see now signs of trend reversal and the stock is trading below all major moving averages. One should not catch the falling knife.

Ola’s price has slipped below the crucial Rs 35 support, indicating clear weakness. With the stock now trading near Rs 32, the breakdown signals deteriorating sentiment and a lack of buying interest. Such price action typically suggests further downside risk or prolonged consolidation, said Jigar S Patel, Senior Technical Research Analyst at Anand Rathi Shares & Stock Brokers.

"Until the stock manages to reclaim lost levels and show meaningful strength, the technical setup remains negative. There are no visible signs of recovery, no bullish reversal patterns, and momentum indicators are not supportive. Considering these factors, it is prudent to stay away from this counter for now and wait for stability before reconsidering any exposure," he said.

The stock is clearly locked in a long-term downtrend, with price trading well below all major moving averages. The 50-DMA, 100-DMA and 200-DMA are stacked downward, acting like a descending ceiling, which confirms sustained bearish pressure. Recent price action shows a steady series of lower highs and lower lows, and every minor pullback is being sold into, indicating weak demand, said Pravesh Gour, Senior Technical Analyst at Swastika Investmart.

"The technical setup favors a 'sell-on-rise/avoid fresh longs' approach until the stock decisively reclaims key moving averages and shows volume-backed strength. A sustainable trend change would require a breakout above the 50-DMA with improving RSI and a positive MACD crossover; until then, the bias remains cautious to bearish," he adds.

Gaur suggested that the Rs 42-44 zone acts as a near-term psychological resistance in terms of levels. If it sustains above this level then Rs 70 may be the next level. On the downside, strong support is placed around Rs 24-25.

Sentiment towards Ola Electric remains subdued amid fierce competition from Hero, Ather, Bajaj and TVS Motor. The company has consistently lost market share, with negative news flow about service and declining volumes further pressuring the stock. 

Harshal Dasani, Business Head at INVasset PMS said that the outlook for Ola Electric from here will depend on a combination of demand recovery and operational execution. Stabilisation in sales volumes, improvements in cost efficiency and clearer progress toward operational breakeven would be key to restoring confidence.

"Execution across manufacturing scale, supply chain management and customer experience will be closely tracked in the coming quarters. Until there is stronger visibility on sustained profitability and consistent volume traction, the stock is likely to remain sensitive to quarterly performance updates and broader trends within the electric mobility ecosystem," he adds.