ETERNAL - Technical Analysis with Chart Patterns & Indicators

Last Updated Time : 05 Nov 25, 7:43 am

Technical Rating: 3.2

📉 ETERNAL is showing signs of short-term weakness with bearish momentum indicators. Entry near 310–315 ₹ may offer a better setup, while resistance lies around 340–360 ₹.

📈 Technical Analysis

• 📉 Chart Pattern: The stock is reversing from recent highs, forming lower highs and testing support near 320 ₹.
• 📉 Moving Averages: Price is below the 50-DMA (326 ₹) but above the 200-DMA (283 ₹), indicating short-term weakness but long-term support.
• 📉 RSI (36.1): Bearish zone, approaching oversold territory — signals weak buying interest.
• 📉 MACD (-1.09): Negative crossover, confirming downward momentum.
• 📉 Bollinger Bands: Price near lower band, suggesting oversold conditions but no reversal yet.
• 📈 Volume Trend: Current volume (3.55 Cr.) is higher than 1-week average (2.65 Cr.), indicating active selling pressure.

📍 Entry & Exit Zones

• ✅ Entry Zone: 310 ₹ – 315 ₹ (near support and psychological level)
• 🚪 Exit Zone: 340 ₹ – 360 ₹ (resistance from prior swing highs)

📊 Trend Status

• 📉 Current Trend: Reversing from uptrend to short-term bearish
• ⚠️ Bias: Bearish unless RSI crosses 45 and MACD flattens

✅ Positive

• Strong quarterly PAT growth (691 Cr. vs 602 Cr.) — 64.1% increase.
• Price still above 200-DMA, indicating long-term support remains intact.
• Low debt-to-equity ratio (0.01) reflects financial stability.

⚠️ Limitation

• High P/E (131) and PEG (2.61) suggest overvaluation compared to industry PE (30.2).
• Weak ROCE (7.34%) and ROE (6.55%) indicate inefficient capital use.
• Bearish RSI and MACD signal declining momentum.

📉 Company Negative News

• FII holding dropped by 3.30%, indicating reduced foreign investor confidence.

📈 Company Positive News

• DII holding increased by 3.55%, showing domestic institutional support.
• Quarterly profit growth may support sentiment if sustained.

🏭 Industry

• Technology services sector remains volatile but offers long-term growth potential.
• ETERNAL trades at a significant premium to industry PE, reflecting high investor expectations.

🧾 Conclusion

• ETERNAL is reversing from recent highs with bearish technical indicators.
• Short-term traders should wait for confirmation near 310 ₹ before entering.
• Long-term investors should monitor valuation and earnings consistency before adding exposure.

Sources

TSR

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