Shares of the Bombay Stock Exchange (BSE) ended Tuesday’s session with gains of over 10%, reaching a new record high of Rs 3,264.70 on April 23, 2024. The stock had risen for the second day in a row.
BSE shares have demonstrated positive returns across multiple time frames. Over the past month, the stock has given a commendable 33.11% return, showcasing its stability and growth potential. The last six months have seen even more impressive results, with a substantial increase of 72%, indicating a strong upward trend.
Year-to-date, BSE shares have surged by 40%, reinforcing the stock’s positive momentum in the current fiscal year. Looking at the broader picture, the stock has delivered an impressive return of over 600% in the past twelve months with the stock’s 52-week low of Rs 458 was recorded last year on April 23, 2023.
Analyst on BSE share
“The stock’s rise of over 600% in the last year raises concerns about potential overvaluation. While the exchange’s robust financial performance and increased trading volumes have fueled the rally, such exponential gains would be unsustainable in the long run,” said Atul Parakh, CEO of Bigul.
Parakh also said moving forward, investors should exercise caution and closely monitor the stock’s valuations relative to its fundamentals. For BSE, its strong brand equity and diversification efforts bode well for long-term growth. However, intense competition from other exchanges and regulatory changes could pose challenges.
Commenting on the techinal levels on BSE stock Rohan Shah, Technical Analyst at Religare Broking said BSE has witnessed a sharp rally after registering a breakout from the four-month consolidation range. However, on the lower and medium-degree charts, the stock has become highly overbought with the formation of negative divergence in the momentum indicators, and thus profit-taking or time-wise correction cannot be ruled out.
Shah also added that traders shall avoid creating fresh longs as of now, as risk reward is not favorable at the current juncture. We feel traders can consider adding longs around the key support of the 2950–2900 zone, which coincides with its previous resistance area and short-term moving average. While on the higher side, 3150–3200 remains a strong hurdle from a short-term perspective.
Pravesh Gour, Senior Technical Analyst at Swastika Investmart said that this action is a reaction to the rising demand for Sensex Options, the average daily turnover of which has significantly increased. The spike in BSE’s stock price has also been attributed to the resumption of Bankex and Sensex futures contracts with weekly expirations and lower lot sizes in May 2023.
“BSE has further solidified its position in the derivatives market by diversifying into a number of markets, such as options on futures contracts for base metals (copper, zinc, and aluminum) and energy (WTI and Brent oil). the business’s net profit increased throughout the course of a year while its revenue increased consistently,” added Gour.
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