Narayana Hrudayalaya Faces Five Technical Red Flags: SEBI RA Warns Of An Overstretched Rally

The stock has surged nearly 65% in 2025, but the analyst highlights a buildup of risk factors that could trigger a near-term correction.

Narayana Hrudayalaya has delivered strong gains after breaking out of long-term resistance levels, but the rally may be getting tired in the short term. 

According to SEBI-registered research analyst Rajneesh Sharma, there are five major technical red flags. 

He noted that the stock is approaching a multi-year red trendline resistance that has historically triggered profit booking. 

“Expect supply to emerge here unless strong volume breaks it clean,” Sharma said, adding that trendline resistance is a classic spot where strong hands reassess their positions.

He pointed to an extreme overbought weekly Relative Strength Index (RSI) at 83.35 and the presence of bearish divergence, where price made a higher high but RSI made a lower high. 

Sharma said this “typically signals momentum exhaustion.”

The Mean Deviation Index (MDI) is “at its most stretched level in recent history,” increasing the statistical likelihood of a pullback or sideways action, he noted. 

Sharma also said that peak volumes came earlier in the rally, while the breakout week’s volume was “decent but not explosive,” suggesting the breakout may lack strong new buyer support.

In terms of ownership, Sharma flagged that public holding had climbed to 17.34% as of March 2025, its highest level in years. 

He said that Foreign Institutional Investors (FIIs) have reduced their holdings from about 15% in 2019 to 9.66%, while Domestic Institutional Investors (DIIs) now hold 8.52%, down from previous levels. 

Sharma said this could indicate a “classic distribution setup,” where institutions may be booking profits while retail investors enter at market highs. He advised traders to avoid chasing the rally, citing an unfavorable risk/reward setup. 

He recommended watching the ₹2,000–2,080 zone for potential pullbacks.

“The stock looks overstretched, overbought, and technically vulnerable to consolidation or correction,” Sharma concluded.

Narayana Hrudayalaya’s stock has risen 64.8% so far in 2025.

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