Kalyan Jewellers Shares Fall 37% From All-Time Highs

Kalyan Jewellers stock has seen a significant decline of 37% from its all-time high, reached on january 2, 2025, due to a combination of market sentiment, technical indicators, and speculative rumors.

Key Factors Behind the Decline:
Rumors and Allegations:

Despite the company denying rumors of IT raids and bribery allegations, the negative news surrounding kalyan Jewellers has impacted investor sentiment.
The company addressed these concerns by clarifying that there had been no IT raids and the bribery allegations were “absurd”. They also confirmed that they have a transparent inventory auditing process and have repaid significant debt, including Rs 450 crore over 18 months.
Technical Indicators:

The Relative Strength Index (RSI) for the stock is currently at 21, indicating the stock is oversold. An RSI below 30 suggests that the stock may be due for a rebound, though it could continue to experience volatility in the short term.
F&O Ban:

The stock is under a Futures & Options (F&O) ban, meaning no new positions can be initiated in the stock through derivatives, which could further dampen investor enthusiasm.
Market Capitalization Drop:

From a market capitalization of over Rs 82,000 crore at its peak, the company's market cap has fallen to Rs 50,000 crore, reflecting the broader investor concern and decline in stock price.
Technical Analysis:
The stock is nearing a key support level of Rs 515, which could offer potential for a rebound. Analyst Riyank Arora from Mehta Equities suggests that Rs 560–570 could be potential recovery levels if the stock stabilizes.
However, Arora also advises a disciplined approach, recommending a stop loss near Rs 510 to manage risk, especially for short-term traders.
Long-Term Prospects:
Despite the recent decline, kalyan Jewellers has shown multibagger returns over the long term. Over the last two years, the stock has increased by 320%, and over the past three years, it has risen by an astonishing 626%.
For long-term investors, the stock may still hold potential given its strong historical performance and recent efforts to address financial transparency and market concerns.
In summary, while the stock is facing a short-term slump, driven by rumors, technical factors, and market sentiment, there may be opportunities for a rebound, especially for those prepared to weather the volatility. The company's actions to clarify the rumors and their historical growth performance suggest potential for recovery in the longer term.
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SIBY JEYYA

17/01/2025 04:07 PM