Brickwork impact: Charts favour Icra; CRISIL, CARE Ratings test key levels

ICRA and CRISIL have gained up to 22 per cent so far this year, while Care Ratings has been a underperformer, down 14 per cent.

Securities and Exchange Board of India (Sebi), the regulatory body for securities and commodity market in India cancelled the licence of Brickwork Ratings on the ground of irregularities in 'discharging its duties', lack of due diligence, and repeated lapses. SEBI has directed the ratings agency unwind operations in the next six months.

In January 2020, Sebi and the RBI undertook a joint inspection of Brickwork, where the two regulators found “several irregularities”. Following this, Sebi had issued an administrative warning and directed it to rectify the discrepancies and take corrective measures. READ MORE
 

Meanwhile, in the domestic equity market, there are three listed rating players namely CARE Ratings, CRISIL and ICRA. On a year to date basis, ICRA has gained 22 per cent so far, followed by a 19 per cent gain by CRISIL. Shares of Care Rating have underperformed, and were down 14 per cent so far this year. 

A broader time-frame, indicates that shares of ICRA and Crisil exhibited a steady up move post Covid-19 bloodbath. Whereas, Care Ratings pulled-back initially, only to plummet in mid-2021. In comparison with teh 2021 high, Care Ratings trades 31 per cent lower.
 

Given the news development on Brickwork Ratings, here’s a technical check on the listed rating stocks:-

ICRA Ltd (ICRA)

Outlook: Underlying trend is bullish, breakout over Rs 4,200 could hit new 52-week high

ICRA recorded a new 52-week high in April this year, before retreating to the cushion of a 50-weekly moving average (WMA) positioned at Rs 3,766.  The overall outlook points to a bullish bias that seems to rise higher gradually. A “Golden Cross” formation supports the positive stance, shows the weekly chart.

On an immediate scale, the stock seems gliding towards the 200-day moving average (DMA) placed at Rs 3,797, thus making attempts to hold the bullish bias. A breakout above the Rs 4,200-level could see the stock inch towards a new 52-week high of Rs 4,500. CLICK HERE FOR THE CHART

CRISIL Ltd (CRISIL)

Outlook: Support of 50-WMA holds the key relevance

CRISIL’s price actions so far seems to have honoured the support of 50-WMA currently placed at the Rs 3,030 level, since breaking out in the Covid-19 era way back in 2020. Thus, as long as the stock adheres to the same shield, the positive bias shall prevail. 

On the higher side, the present move that retraced to the 50-WMA support could see bears clashing at Rs 3,200 and Rs 3,400 levels. CLICK HERE FOR THE CHART

CARE Ratings Ltd (CARE)

Outlook: Requires to take off 200-WMA

After October 2018, shares of Care Ratings failed to take out the 200-WMA barrier resolutely. It did make significant attempts in 2021, but failed to march ahead. The current 200-WMA is at Rs 549.50 and continues to challenge the bull spirit. 

As and when 200-DMA is conquered, the bullish bias could see the stock proceed towards Rs 600 and Rs 650 levels, as shown on the weekly chart. The immediate support for the current sentiment stays at Rs 490 level. CLICK HERE FOR THE CHART