Zomato share price tanks 14% in 2 days after Blinkit acquisition deal; should you buy, sell or hold-

Zomato share price tanks 14% in 2 days after Blinkit acquisition deal; should you buy, sell or hold?

Zomato share price has tumbled nearly 15 per cent to Rs 60.45 apiece on BSE in two trading session after the online food delivery platform announced the acquisition of Blinkit (formerly known as Grofers) for Rs 4,447 crore in a share swap deal as part of its strategy of investing in quick commerce business. The stock has plunged over 64 per cent from its all time high of Rs 169 apiece.

Technical analysts say that Zomato stock looks absolutely weak on the technical charts.”From a technical perspective, the stock is now back below 50-DMA; and it is below all its key moving averages as well. RSI has marked a fresh 14-period low and is bearish,” Milan Vaishnav, CMT, MSTA, Consulting Technical Analyst and founder, Gemstone Equity Research & Advisory Services, told FinancialExpress.com.

Ravi Singh, VP & Head of Research, Share India Securities told FinancialExpress.com that the latest Zomato – Blinkit deal is not going to make any difference in the stock sentiments in near term as Blinkit is at an early stage and its business model is yet to be proven. “Investors are advised to refrain themselves from taking fresh buy positions at current levels,” Singh advised. He added that the stock may touch levels of 55 in the current scenario and any recent reversal in the trend looks unlikely.

Zomato stock price is down considerably as investors send a strong warning to the promoters of acquiring companies which could take a long time to break even thereby adding more pressure to their existing business margins, said an analyst. “Technically, till stock does not close above 80 on the daily chart, the trend is bearish. 52-56 remains a strong support zone,” AR Ramachandran, Co-founder & Trainer, Tips2Trades, told FinancialExpress.com.

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