Zomato shares saw a 0.54% increase, trading at ₹258.80 by 11:04 AM on October 21, 2024. Despite market volatility, with the Nifty and Sensex both down by 0.58% and 0.1% respectively, Zomato has managed to sustain upward momentum. But will this trend continue, or is it a short-term surge?
Zomato’s Technical Indicators – Is It Time to Buy?
Zomato’s stock is currently trading above the 100-day and 300-day Simple Moving Averages (SMA) but below its 5-day, 10-day, 20-day, and 50-day SMAs, signaling mixed trends. This pattern indicates that the stock may face short-term resistance while showing long-term strength.
| SMA Days | SMA Value |
|---|---|
| 5-Day | ₹272.28 |
| 10-Day | ₹273.91 |
| 20-Day | ₹277.87 |
| 50-Day | ₹268.18 |
| 100-Day | ₹236.12 |
| 300-Day | ₹223.11 |
Zomato has support at the 100-day and 300-day SMAs, which could act as a buffer if selling pressure increases. Key resistance is expected around the ₹266 to ₹275 range, which aligns with the 5-day and 10-day SMAs.
Zomato’s Key Pivot Levels
From a technical perspective, Zomato is facing key pivot levels that traders should watch closely:
| Pivot Levels | Price |
|---|---|
| Resistance 1 | ₹266.32 |
| Resistance 2 | ₹275.83 |
| Resistance 3 | ₹281.37 |
| Support 1 | ₹251.27 |
| Support 2 | ₹245.73 |
| Support 3 | ₹236.22 |
With resistance levels above ₹266 and strong support at ₹251, depending on broader market conditions, Zomato could either continue its upward trend or fall back to test these supports.
Zomato’s Recent Market Performance
Despite today’s modest gains, Zomato has experienced volatility in the past week. Here’s a snapshot of its performance over the last five trading days:
| Date | Opening Price | Closing Price | High | Low | % Change |
|---|---|---|---|---|---|
| 20-Oct-2024 | ₹259.95 | ₹258.80 | ₹267.00 | ₹257.45 | -0.44% |
| 19-Oct-2024 | ₹262.50 | ₹259.10 | ₹270.30 | ₹258.25 | -1.29% |
| 18-Oct-2024 | ₹265.00 | ₹262.50 | ₹272.00 | ₹261.50 | -0.94% |
The data shows that Zomato has faced some selling pressure, but today’s price increase shows signs of resilience. The stock has fluctuated between ₹257 and ₹267 over the last few days, with market analysts speculating about further movement based on broader market trends.
Should You Buy, Hold, or Sell Zomato?
Fundamentally, Zomato has a Return on Equity (ROE) of 1.76% and a current P/E ratio of 379.63, making it an expensive stock for value investors. However, its growth potential remains attractive to those betting on the long-term success of India’s booming online food delivery market.
Key Fundamentals:
- FII Holding: 47.28% (increased from 46.13% last quarter)
- MF Holding: 2.41% (increased from 2.18% in the previous quarter)
- Promoter Holding: 0.00%
Conclusion: Is Zomato a Good Buy?
Zomato’s mixed technicals suggest caution in the short term, but its long-term growth potential is still attractive to institutional investors. With foreign institutional investment (FII) on the rise and support from mutual funds, the stock could see a rebound if market conditions stabilize.
Disclaimer
Stock market investments come with inherent risks. Please consult a financial advisor before making any trading decisions.
