Crompton Greaves: Momentum Exhausted, Base Formation Underway

After a sharp corrective leg, Crompton Greaves Consumer appears to be completing a Wave (2) retracement, setting the stage for a potential next impulse.

Wave Structure
The broader cycle from the ₹125 low (2016) to ₹512.80 (2021) unfolded as a clean five-wave impulse, marking higher-degree Wave 1.
A deep A–B–C correction followed, bottoming near ₹251 — the low of higher-degree Wave 2.
From there, the stock rallied in five waves to ₹484 (labeled Wave (1) of the new impulse).
The ongoing decline fits neatly as a Wave (2) correction, which could be nearing completion — right above the crucial invalidation level of ₹251.
As long as ₹251 holds, the bullish impulse count remains valid.

Momentum Check
RSI on the weekly timeframe has dipped near 31, retesting its prior reversal zone.

“Momentum washed out — Wave (2) may be nearing completion.”

That aligns with the exhaustion one typically sees at the tail end of a corrective C-wave.

Technical Context
The Volume Profile shows heavy trading between ₹300–₹320 — the key supply-demand zone.
Once price reclaims this shelf, it could validate the start of Wave (3), potentially targeting new highs over the coming quarters.
Invalidation remains at ₹251 — a clean, technical stop defining structural risk.

Fundamental Snapshot


Crompton’s numbers reinforce the long-term base-building narrative:

• Revenue: ₹78.61 B in FY 2025 — a steady climb from ₹39 B in 2017.
  
• Free Cash Flow: ₹6.06 B, with healthy generation despite periodic volatility.
  
• Debt: Nil as of FY 2025 — a clean balance sheet.
  
• P/E Ratio: ~34.8, compressing over the past two years as earnings normalized.
  
• Market Cap: ₹181 B, stable yet below its 2021–22 peak, indicating subdued sentiment.
  

Summary
The setup points to a near-completion of corrective structure, exhausted momentum, and stable fundamentals — a combination that often precedes a strong impulsive advance.

Disclaimer:
This analysis is for educational purposes only and does not constitute investment advice. Please do your own research (DYOR) before making any trading decisions.