Jio Finance share price looks set to extend its four-session losing streak, with investors continuing to book profit amid a broader market risk aversion propelled by the Israel-Iran war. The stock lost 4.05% in the last five months, but is up by 7% in the longer monthly time frame after a prolonged rally between early-April and early June. Furthermore, it gained about 35% in the last three months, pointing to a bullish undercurrent.
However, for all its gains, Jio Finance (NSE: JIOFIN) finds itself in a susceptible position due to its premium valuation. As of this writing, the company’s P/E ratio is at 117x, which is well above industry average. In addition, its price-to-book (P/B) ratio is at 1.5x, adding weight to its potential overvaluation. These factors make Jio Finance share price susceptible to lukewarm news or small shifts in the broader macroeconomic ecosystem.
Notably, there has been a significant decline in the stock’s traded volume during the recent price decline. That points to a cautious posture by investors and signals a likely extension of the downward trajectory in the near-term. However, the June RBI Monetary Policy Committee (MPC) meeting came out with resolutions that will likely favour medium-term gains by lenders, including Jio Finance. Key among them is that the MPC reduced Cash Reserve Ratio by 100 basis points to 3% while the interest rate was cut by 50 basis points to 5.50%.
Jio Finance Share Price Prediction
Jio Finance share price pivots at Rs 296 and action below that level calls for further downside. The stock will likely find initial support at Rs 291. However, an extended control by the sellers will break below that level and potentially send the action lower to test Rs 288.
Alternatively, the stock could break above the pivot mark and shift the momentum to the upside. That could see the first resistance encountered at Rs 300. Breaking above that level will invalidate the downside narrative. In addition, a stronger upward momentum could push the price higher to test Rs 304 in extension.
