SONATSOFTW - Technical Analysis with Chart Patterns & Indicators

Last Updated Time : 20 Dec 25, 03:55 pm

Technical Rating: 3.0

📈 Chart & Trend Analysis:

SONATSOFTW is trading at ₹345, below both its 50 DMA (₹361) and 200 DMA (₹403), indicating short-term weakness. RSI at 34.6 suggests the stock is approaching oversold territory, hinting at potential rebound opportunities. MACD at -6.32 is negative, confirming bearish momentum. Price is significantly below its 52-week high (₹672) but above its low (₹286). Bollinger Bands show price leaning toward the lower band, reflecting downside pressure. Current volume (3.38 lakh) is below the weekly average (4.12 lakh), suggesting reduced participation.

🔑 Momentum Signals:

- RSI near 35 indicates weak momentum, potential for rebound if support holds.

- MACD negative, confirming bearish undertone.

- Price below both DMAs signals short-term weakness.

- Lower-than-average volume shows cautious sentiment.

🎯 Entry & Exit Zones:

- Support: ₹340 – ₹345 (near current levels).

- Resistance: ₹360 – ₹365 (near 50 DMA).

- Optimal Entry: ₹340 – ₹345 range for rebound trades.

- Exit/Profit Booking: ₹360 – ₹365 unless breakout occurs.

📊 Trend Status:

The stock is reversing downward with bearish signals. Oversold RSI may trigger a short-term relief rally, but overall trend remains weak unless price sustains above 200 DMA.

Positive

• EPS at ₹6.90 reflects earnings base.
• Quarterly PAT improved to ₹147 Cr from ₹22.7 Cr sequentially.
• Strong ROCE (30.6%) and ROE (28.4%) highlight operational efficiency.
• DII holdings increased (+0.78%), showing domestic investor support.
• Dividend yield at 1.30% provides income return.

Limitation

• Price trading below both 50 DMA and 200 DMA.
• MACD negative, signaling bearish momentum.
• High P/E ratio (50.1) compared to industry average (26.4).
• PEG ratio at -16.2 indicates valuation concerns.
• Quarterly profit variation at -10.8% shows weak momentum.

Company Negative News

• FII holdings reduced (-0.83%), showing weaker foreign investor confidence.
• Quarterly profit variation at -10.8% indicates declining profitability.
• Stock trading near 52-week low zone (₹286), reflecting heavy correction.

Company Positive News

• DII holdings increased (+0.78%), showing domestic investor confidence.
• Sequential PAT growth from ₹22.7 Cr to ₹147 Cr highlights operational recovery.
• Dividend yield at 1.30% supports investor returns.

Industry

• Industry P/E at 26.4, SONATSOFTW trades at a premium valuation (P/E 50.1).
• IT services sector showing cyclical demand recovery.
• Peers trade at lower multiples, making SONATSOFTW relatively expensive but backed by efficiency metrics.

Conclusion

⚠️ SONATSOFTW is in a bearish reversal phase with oversold RSI suggesting possible short-term bounce. Entry near ₹340–₹345 may be considered for rebound trades, while resistance at ₹360–₹365 is critical. Strong ROCE/ROE and sequential PAT growth support medium-term stability, but weak technicals and stretched valuations warrant cautious positioning.