Bears were battering PVR bulls on January 16, as the counter saw heavy short buildup, a bearish phenomenon that signals more pain in the coming days for the multiplex chain stock. The open interest surged over 15 percent to the highest in the month as the price dropped to its lowest in seven days.
The sell-off comes amid a rating downgrade from Kotak Institutional Equities. The research house downgraded the stock to "add" from "buy" with the target price at Rs 1,850, a cut of 16 percent.
Kotak said recent weak collections reflect the change in consumer behaviour. With the rise of over-the-top (OTT) platforms, movie collections had taken a hit. A dearth of quality stories, too, hit consumer sentiment.
The stock has been under pressure despite the merger with nearest-rival INOX. The price has broken below the 20-day simple moving average (SMA) as well as the 20-day exponential moving average.
In the spot market, the stock was down 4 percent at Rs 1,676.95 as of 1 pm. The futures contract was also trading 5 percent lower.
The options data suggests put writers shifted to 1,600 strikes, which is now emerging as the support area for the counter. Call writing was spread across 1,700 to 1,760, a zone that may pose a hurdle for the stock in the coming days.
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