SUMICHEM - Technical Analysis with Chart Patterns & Indicators

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

Technical Rating: 3.1

📊 Chart Patterns: SUMICHEM is trading close to its support zone at 432 ₹, with resistance levels at 482 ₹ (50 DMA) and 516 ₹ (200 DMA). The price action shows weakness after failing to sustain above 482 ₹.

📈 Moving Averages: Current price (444 ₹) is below both 50 DMA (482 ₹) and 200 DMA (516 ₹), signaling bearish momentum.

📉 RSI: At 34, RSI is near oversold territory, suggesting potential for a short-term bounce but overall weak momentum.

📉 MACD: Negative (-8.35), confirming bearish crossover and downside pressure.

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

📊 Volume Trends: Current volume (2,10,129) is lower than average weekly volume (2,66,287), showing reduced participation and lack of strong buying interest.

🚦 Momentum Signals: Short-term momentum remains bearish. A bounce may occur if RSI dips further into oversold levels, but recovery requires crossing 482 ₹.

🎯 Entry Zone: 432–440 ₹ (near support, oversold RSI).

🎯 Exit Zone: 482–516 ₹ (resistance at 50 & 200 DMA).

📌 Trend Status: The stock is consolidating with bearish bias, not yet reversing into an uptrend.

Positive

• Strong ROCE (25.1%) and ROE (18.8%) indicate efficient capital usage.
• Low debt-to-equity (0.02) ensures financial stability.
• Institutional support with DII holdings increasing by 0.32%.

Limitation

• High P/E (41.1) compared to industry average (27.6) suggests overvaluation.
• PEG ratio of 8.20 indicates expensive growth prospects.
• Quarterly profit variation (-6.78%) shows slowing momentum.

Company Negative News

• Decline in quarterly PAT from 180 Cr. to 178 Cr.
• Weak technicals with price below both 50 & 200 DMA.

Company Positive News

• DII holdings increased, showing institutional confidence.
• Stable dividend yield (0.27%) and strong balance sheet.

Industry

• Industry P/E at 27.6 indicates sector is moderately valued.
• Chemical sector remains cyclical but supported by demand in agriculture and specialty chemicals.

Conclusion

⚖️ SUMICHEM is currently consolidating with bearish bias, trading below key moving averages. Short-term traders may consider entry near 432–440 ₹ with exit around 482–516 ₹. Long-term investors should be cautious due to high valuations and slowing profit growth, but strong fundamentals and low debt provide resilience.