ETERNAL - Technical Analysis with Chart Patterns & Indicators

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

Technical Rating: 3.5

📊 Chart Patterns & Trend: ETERNAL is consolidating near its 200 DMA (287 ₹) while trading below the 50 DMA (305 ₹). Support lies around 280–285 ₹, while resistance is seen near 300–305 ₹. The stock is in a consolidation phase with weak momentum.

📈 Moving Averages: Current price (286 ₹) is below the 50 DMA but aligned with the 200 DMA, showing short-term weakness but long-term support.

📉 RSI: At 38.0, RSI indicates oversold conditions, suggesting potential accumulation zones.

📉 MACD: Negative (-6.68) reflects bearish momentum, but a crossover could signal reversal if buying volume increases.

📊 Bollinger Bands: Price is near the lower band, implying limited downside and potential rebound.

📊 Volume Trends: Current volume (1.53 Cr.) is significantly below the 1-week average (3.03 Cr.), showing reduced participation and consolidation.

🎯 Entry Zone: 280–285 ₹ (near support and oversold RSI)

🎯 Exit Zone: 300–305 ₹ (near resistance and upper consolidation band)

Positive

• Quarterly PAT surged from 602 Cr. to 691 Cr., showing strong earnings growth.
• DII holdings increased by 3.55%, reflecting strong domestic institutional confidence.
• Low debt-to-equity ratio (0.01) ensures financial stability.

Limitation

• Extremely high P/E (117) compared to industry average (42.2) suggests significant overvaluation.
• Weak ROCE (7.34%) and ROE (6.55%) highlight poor capital efficiency.
• No dividend yield (0.00%) reduces income appeal for investors.
• EPS at 2.45 ₹ is modest relative to valuation.

Company Negative News

• FII holdings decreased by 3.30%, showing reduced foreign investor confidence.
• Weak trading volume compared to average indicates lack of strong momentum.

Company Positive News

• Quarterly profit variation at 64.1% highlights strong earnings momentum.
• 52-week performance index at 53.9% shows resilience compared to broader market.

Industry

• Industry P/E at 42.2 indicates sector is moderately valued compared to ETERNAL’s high valuation.
• Sector demand expected to remain stable with growth in large-cap companies.

Conclusion

⚖️ ETERNAL is in a consolidation phase with weak momentum. Entry near 280–285 ₹ offers favorable risk-reward, while exits around 300–305 ₹ are optimal. Watch for RSI recovery and MACD crossover to confirm reversal signals. High valuation remains a concern despite earnings growth.