SUN PHARMACEUTICAL LTD.
Technical View
- Sun Pharma’s price action is indicating potential signs of a continuation of its primary upward trend, highlighted by a decisive reclaiming of the 50 DMA during the recent trading session.
- The stock has surged significantly, achieving an 83% increase from its lows in October 2023 and 42% from its lows in June 2024. However, following this rally, the price experienced a correction of only 12% due to profit-taking, before displaying early indications of a possible trend reversal. This indicates that the savvy investors continue to hold their position thereby limiting the drawdowns.
- The daily price action observed on December 2, 2024, showcases increased activity from passive buyers amidst the profit booking, suggesting a phase of bullish accumulation as the stock consolidates.
- This price movement has resulted in a bullish range breakout, with 50 DMA and the weekly shorter-term moving average now serving as immediate support, presenting a favorable risk-to-reward opportunity.
- Additionally, the RSI across both daily and higher timeframes is trading well above its median, without any divergence from the price, indicating strong bullish momentum—a positive development.
- The stock also shows signs of improving earnings per share (EPS) strength, increased buyer demand, and relative strength compared to the Nifty50.
- We recommend purchasing shares of Sun Pharma with a target price of 2004 and advise maintaining a protective stop at 1760.
