Premier Explosives shares in a downtrend & analysts expect more correction, here's why

Shares of Premier Explosives are in a short-term correction, falling 12% in a month. The downtrend has also affected returns of the multibagger stock in the long term. Shares of the defence firm have taken a hit from the market sentiment, clocking just 6.6% returns this year. 

In comparison, the defence stock has risen 560% in three years and zoomed 2,194% in five years. The multibagger stock has gained 87% from its 52 week low of Rs 308.95 reached on April 7, 2025. 

However, in the current session, Premier Explosives stock stock rose 4% to Rs 581.05 against the previous close of Rs 558.75. Total 0.31 lakh shares of the firm changed hands amounting to a turnover of Rs 1.76 crore today. Market cap of the firm rose to Rs 3123 crore. Premier Explosives shares have a beta of 0.9, indicating average volatility in a year.

In terms of technicals, the relative strength index (RSI) of the stock stands at 39.4, signaling it's trading neither in the overbought nor in the oversold zone. 

The stock is trading lower than the 5 day, 10 day, 20 day, 30 day, 50 day but higher than the 100 day, 150 day and 200 day moving averages.

Technical analysts are mostly bearish on the outlook of the stock. Here's a look at what they said. 

Shitij Gandhi, Sr. Research Analyst (Technical), SMC Global Securities said,"The stock faced repeated rejection near the Rs 680 mark, indicating strong overhead resistance and triggering a short-term correction. At present, the price is testing the 100-day EMA around Rs 560, which serves as a crucial support zone. A close below this level could accelerate the decline toward Rs 520–Rs 500 levels. Momentum has also weakened, with RSI drifting lower and showing reduced buying strength. Overall, the near-term outlook has turned cautious, and traders may prefer to stay watchful until the stock reclaims Rs 600 levels with strong volume support."

Hitesh Tailor, Research Analyst, Choice Broking said, "Premier Explosives is currently trading around Rs 582.10 and continues to move within a sideways range, indicating a phase of consolidation. The stock has witnessed multiple rejections near the Rs 670–Rs 680 zone, where consistent selling pressure has emerged, making it a strong resistance area. On the downside, it is taking crucial support around its 200-day EMA placed near Rs 525, which remains a key level to watch. A decisive breach below this zone could trigger further downside pressure. However, as long as the stock holds above this support, the price is likely to remain range-bound. For fresh buying opportunities, traders should wait for a confirmed breakout above Rs 680 levels, accompanied by strong volumes, which could open the door for a rally towards Rs 825– Rs 840 levels. Until then, it is advisable to monitor price action closely and maintain disciplined risk management within the current trading range."

Kunal Kamble, Sr. Technical Research Analyst at Bonanza Portfolio said, "Premier Explosives exhibits a mixed trend structure, with the primary trend remaining bullish, while the secondary and minor trends have turned flat to bearish, indicating short-term weakness. On the daily timeframe, the stock faced strong resistance around the Rs 670 level, followed by a notable decline over the last two trading sessions. Currently, it is testing support near the 100 EMA — a breakdown below this level could trigger further downside towards Rs 530. A short positions below Rs 562, with a target of Rs 530, as the short-term outlook turns increasingly bearish."

Osho Krishan from Angel One said, "Premier Explosives has experienced a correction of nearly 12 percent over the past week, retracting to the 100-day exponential moving average (DEMA) following an impressive performance. Technically, the stock is supported at the Rs 540 level, and a decline below this threshold is likely to have a negative impact on market sentiment. Conversely, the Rs 620 level is identified as an intermediate resistance; a decisive breach of this barrier may catalyze renewed momentum in the subsequent period."

However, Riyank Arora, Technical Analyst at Mehta Equities appears bullish on the outlook of the stock. 

"Premier Explosives shows a bullish structure on the daily chart. The stock has been consolidating between Rs 540-Rs 600 for three months, with a rising 20-day EMA and a bullish crossover of the 50-day EMA. Volume has spiked on the last two up-moves, indicating buying interest. A breakout above Rs 600- Rs 610 on strong volume could target Rs 680- Rs 700 in the next 3-4 months, with a stop-loss below Rs 530," said Arora.