SUNPHARMA - Technical Analysis with Chart Patterns & Indicators

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

Technical Rating: 3.6

📊 Chart Patterns: SUNPHARMA is trading near its 50 DMA (1,746 ₹) and comfortably above its 200 DMA (1,701 ₹). The price action suggests sideways consolidation with resistance at 1,910 ₹ and support at 1,547 ₹.

📈 Moving Averages: Current price (1,745 ₹) is aligned with the 50 DMA and above the 200 DMA, indicating medium-term bullish bias but short-term indecision.

📉 RSI: At 42.8, RSI is neutral to slightly weak, suggesting limited momentum and room for consolidation.

📈 MACD: Positive (10.5), showing bullish crossover and potential for upward momentum if sustained.

📊 Bollinger Bands: Price is near the mid-band, indicating consolidation. A breakout above 1,800 ₹ could trigger momentum toward 1,910 ₹.

📊 Volume Trends: Current volume (37,28,300) is significantly higher than average weekly volume (22,09,775), showing strong participation and potential accumulation.

🚦 Momentum Signals: Short-term signals are mixed. MACD suggests bullishness, but RSI indicates caution. Sustained move above 1,800 ₹ is required for confirmation.

🎯 Entry Zone: 1,700–1,730 ₹ (near 200 DMA support).

🎯 Exit Zone: 1,880–1,910 ₹ (resistance zone).

📌 Trend Status: The stock is consolidating with bullish undertone, awaiting breakout above resistance.

Positive

• Strong ROE (17.8%) and ROCE (16.8%) indicate efficient capital utilization.
• PEG ratio of 1.22 suggests reasonable valuation relative to growth.
• High trading volume indicates investor interest and accumulation.

Limitation

• Very high P/E (89.6) compared to industry average (30.6), signaling overvaluation.
• Debt-to-equity ratio of 0.56 is higher than peers, adding leverage risk.
• Quarterly profit variation (-32.7%) shows earnings volatility.

Company Negative News

• PAT declined sharply from 927 Cr. to 564 Cr. in the latest quarter.
• FII holdings reduced by -0.71%, showing reduced foreign investor confidence.

Company Positive News

• DII holdings increased by 0.74%, reflecting domestic institutional support.
• Dividend yield of 0.92% provides steady returns to shareholders.

Industry

• Industry P/E at 30.6 indicates moderate valuation compared to SUNPHARMA’s elevated levels.
• Pharma sector remains defensive with strong demand drivers in healthcare and generics.

Conclusion

⚖️ SUNPHARMA is consolidating near its 50 DMA with bullish undertone supported by MACD and strong volume. Entry near 1,700–1,730 ₹ offers favorable risk-reward, with exit around 1,880–1,910 ₹. Long-term investors should be cautious of high valuations and earnings volatility, but sectoral strength and institutional support provide resilience.