SUMICHEM - Swing Trade Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Swing Trade Rating: 4.3

📊 Analysis Summary

SUMICHEM (Sumitomo Chemical India) is showing strong technical momentum and solid fundamentals, making it a promising candidate for swing trading. The stock is trading well above its 50 DMA and 200 DMA, with bullish indicators like RSI and MACD supporting further upside. However, valuation is stretched, so caution is advised near resistance levels.

✅ Strengths

ROCE (24.7%) and ROE (18.5%): Excellent capital and equity efficiency.

MACD Positive (18.9): Strong bullish momentum.

RSI at 67.4: Momentum is strong but nearing overbought — watch for reversal signs.

Trading Above 50 DMA (₹547) and 200 DMA (₹521): Confirmed uptrend.

Low Debt-to-Equity (0.02): Virtually debt-free.

Volume Surge: Current volume (8.23 lakh) vs 1-week average (4.54 lakh) — strong participation.

FII & DII Buying: Both slightly positive — institutional support.

52w Index at 87.0%: Strong relative strength.

⚠️ Weaknesses

High P/E (61.2) vs Industry PE (36.5): Overvalued.

PEG Ratio (10.8): Extremely expensive relative to growth.

Quarterly Profit Decline (-9.23%): Minor earnings contraction.

Dividend Yield (0.20%): Minimal income support.

Book Value (₹58.1) << Current Price (₹605): Trading at a steep premium.

📈 Optimal Entry Price

Buy Zone: ₹580–₹590 Slight pullback from current levels would offer a better risk-reward entry, especially if RSI cools below 60.

📉 Exit Strategy (If Already Holding)

Target Exit: ₹625–₹635 Near 52-week high and psychological resistance.

Stop Loss: ₹565 Below 50 DMA — exit if momentum fades.

🧠 Final Thoughts

SUMICHEM is a technically strong swing trade with excellent efficiency metrics and bullish momentum. Traders should monitor RSI for signs of exhaustion and consider partial profit booking near highs. A pullback could offer a fresh entry opportunity.

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