SUMICHEM - Swing Trade Analysis with AI Signals

Last Updated Time : 19 Sept 25, 2:15 pm

Swing Trade Rating: 3.7

📊 Swing Trade Analysis for SUMICHEM

SUMICHEM presents a fundamentally strong but technically weak swing trade setup. While profitability and financial health are impressive, short-term momentum indicators suggest caution.

✅ Strengths

Strong Profitability: ROCE at 25.1% and ROE at 18.8% reflect excellent capital efficiency.

Earnings Growth: PAT rose from ₹98.4 Cr. to ₹180 Cr., a 40% jump — a solid earnings catalyst.

Low Leverage: Debt-to-equity ratio of 0.02 adds financial resilience.

EPS Strength: ₹11.1 EPS supports valuation.

Institutional Stability: FII and DII holdings remained steady, indicating neutral sentiment.

⚠️ Weaknesses

Bearish Momentum: RSI at 46.0 and MACD at -6.18 suggest weakening short-term momentum.

Price Below 50 DMA: Trading slightly below the 50 DMA (₹571) indicates short-term softness.

Volume Drop: Current volume is below the 1-week average, showing reduced trader interest.

High Valuation: P/E of 50.9 vs industry average of 31.7 and PEG of 10.2 suggest overvaluation.

Low Dividend Yield: At 0.21%, it offers minimal income support.

🎯 Optimal Entry Price

Entry Zone: ₹550–₹560

A pullback near the 200 DMA (₹540) offers a lower-risk entry if MACD flattens and RSI climbs above 50.

🚪 Exit Strategy (If Already Holding)

Target Exit: ₹600–₹615

A reasonable upside before testing resistance near ₹630.

Stop-Loss: ₹535

Below the 200 DMA to protect against reversal.

🧠 Final Thought

SUMICHEM is a fundamentally strong swing candidate with earnings momentum and financial stability. However, technical indicators suggest waiting for momentum confirmation before entering aggressively. Ideal for tactical traders with disciplined risk management.

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