Stock Radar: Short covering rally on cards for Jio Financial Services after 36% drop; should you buy?:-ET Prime

 

Jio Financial Services hit Rs 394 on April 23, 2024, but lost momentum and closed at Rs 249 on February 7, 2025, marking a 36% drop. It found support above Rs 230 in January and rebounded 1% in a week but remains down 15% in a month. If Rs 230 holds, a short-term recovery toward Rs 300 is possible.

Jio Financial Services

 Ltd is trading near crucial support levels and a short coverings rally could be on the cards, observed experts.

Short-term traders with a high-risk profile can look to buy the stock now for a target of Rs 330-350 in the next 1-2 months, they suggested.

The stock hit a high of Rs 394 on 23rd April 2024 but failed to hold the momentum. It witnessed a steep fall, which pushed it below crucial moving averages on the daily charts.

It closed at Rs 249 on 7th February 2025, which translates into a fall of over 36%.

Jio Financial Services stock seems to have formed a strong base above 230 levels in January 2025 and bounced back. It rose nearly 1% in a week but is down over 15% in a month and over 23% in the last 3 months.

The stock is currently in the bearish territory, but if momentum strengthens and the key support level of 230 holds, we could see a potential rebound toward the 300 level in the short- to medium-term.

The stock is trading below crucial short- and long-term moving averages on the daily charts. The Relative Strength Index (RSI) is placed at 40.7. RSI below 30 is considered oversold and above 70 is overbought.

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“Jio Financial Services stock, after witnessing a steep fall from the 380 level to the 230 zone, has shown signs of bottoming out near the 88.6% retracement level with consolidation visible. It witnessed a pullback towards the 250 level,” said Shilpa Rout, AVP - Derivatives Research, Prabhudas Lilladher.

“On the derivative front, Jio Fin saw a long buildup, and daily VWAP is at a level of 247, with max pain at 250. PUT writers added significant positions at 240 strikes, showing the initial support level, while significant CALL writing was visible at the 260 levels,” she added.

“For the Feb Series Maximum, 250 and 260 CE writers have the highest OI, and 240 and 220 PE writers are holding maximum exposure,” highlighted Rout.

“A decisive close above the 260 zone can trigger a short-covering rally. With the support of 210, one can go long at this counter for an upside target of 330–350 levels,” she recommended.

(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)