ALKEM - Technical Analysis with Chart Patterns & Indicators

Last Updated Time : 20 Dec 25, 03:54 pm

Technical Rating: 3.4

📊 Chart Patterns: ALKEM is trading slightly below its 50 DMA (5,592 ₹) but above its 200 DMA (5,349 ₹), showing mixed signals. Current price (5,556 ₹) is near short-term support at 5,500–5,520 ₹, with resistance around 5,592–5,650 ₹ and major resistance at 5,868 ₹.

📈 Moving Averages: Price above the 200 DMA indicates long-term strength, but failure to hold above the 50 DMA suggests short-term weakness.

📉 RSI: At 39.6, RSI is approaching oversold territory, hinting at potential for a bounce.

📉 MACD: Negative at -8.99, confirming bearish momentum in the short term.

📊 Bollinger Bands: Price is near the lower band, indicating oversold conditions and possible mean reversion.

📊 Volume Trends: Current volume (35,179) is lower than average weekly volume (47,102), suggesting reduced participation and cautious sentiment.

📌 Momentum Signals: Short-term bounce possible from 5,500–5,520 ₹ support, but trend remains weak unless price sustains above 5,592–5,650 ₹.

🎯 Entry Zone: 5,500–5,556 ₹ (near support, oversold RSI).

🎯 Exit Zone: 5,592–5,650 ₹ (short-term resistance), extended resistance at 5,868 ₹.

🔎 Trend Status: Currently consolidating with bearish bias. Reversal requires breakout above 5,650–5,868 ₹.

Positive

• Strong ROCE (19.5%) and ROE (19.9%) indicate efficient capital use.
• Debt-to-equity ratio of 0.06 shows a healthy balance sheet.
• Quarterly PAT improved (724 Cr. vs 610 Cr.), reflecting growth momentum.
• EPS of 204 ₹ supports strong earnings base.

Limitation

• RSI near oversold levels indicates weak momentum.
• MACD negative, confirming short-term bearishness.
• Stock P/E (29.7) is close to industry PE (30.6), offering limited valuation advantage.

Company Negative News

• Stock struggling to stay above 50 DMA, reflecting short-term weakness.
• Volume participation lower than average, showing cautious investor sentiment.

Company Positive News

• Quarterly profit growth (+12.8%) shows operational improvement.
• Dividend yield of 0.82% adds shareholder value.
• FII (+0.36%) and DII (+0.13%) holdings increased, reflecting institutional confidence.

Industry

• Industry PE at 30.6 is slightly higher than ALKEM’s P/E (29.7), suggesting fair valuation.
• Pharmaceutical sector outlook remains strong with consistent demand drivers.

Conclusion

⚖️ ALKEM is consolidating near support with weak short-term momentum but strong long-term fundamentals. Traders may consider entry around 5,500–5,556 ₹ with exit near 5,592–5,650 ₹. Long-term investors can hold for extended targets near 5,868 ₹, while monitoring RSI and MACD for reversal confirmation.