SONATSOFTW - Technical Analysis with Chart Patterns & Indicators

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

Technical Rating: 3.5

Technical Analysis Report for Sonata Software Ltd (SONATSOFTW)

• Trend Status: Consolidating near short-term support
• Moving Averages: Price hovering around 50 DMA (₹372), below 200 DMA (₹419) — neutral to mildly bearish
• RSI: 50.8 — neutral zone, no strong directional bias
• MACD: Positive at 1.02 — weak bullish crossover
• Bollinger Bands: Price near mid-band — range-bound movement
• Volume: Below weekly average — low conviction in current price action

Entry & Exit Zones

• Support Levels: ₹360 (minor support), ₹340 (trendline), ₹286 (52-week low)
• Resistance Levels: ₹372 (DMA 50), ₹395 (gap zone), ₹419 (DMA 200)
• Optimal Entry: ₹355–₹365 (on confirmation of support)
• Optimal Exit: ₹395–₹415 (if reversal sustains)

Positive

• MACD slightly positive — early signs of momentum recovery
• Strong ROCE (30.6%) and ROE (28.4%) — efficient capital deployment
• Debt-to-equity ratio of 0.03 — financially conservative
• DII holding increased by 0.78% — domestic institutional support

Limitation

• Price below 200 DMA — long-term weakness
• Volume below average — lack of strong participation
• PEG ratio of -15.9 — poor growth-adjusted valuation

Company Negative News

• Quarterly PAT declined from ₹18.0 Cr. to ₹22.7 Cr. — sequential drop
• FII holding declined by 0.83% — reduced foreign investor confidence

Company Positive News

• EPS of ₹7.53 — stable earnings base
• Dividend yield of 1.19% — consistent shareholder returns

Industry

• IT services and software — growth-oriented but sensitive to global tech spending
• Industry P/E of 29.4 — SONATSOFTW trades at a premium

Conclusion

Sonata Software Ltd is currently consolidating near its 50 DMA with mixed technical signals. While fundamentals are strong and MACD shows early recovery, volume and price action suggest caution. Traders may consider entries near ₹355 with exits around ₹415, watching for confirmation of trend reversal and institutional flows.