Sun Pharmaceutical Gains 6.25%: 4 Key Factors Driving the Week’s Momentum

2 February 2026: Technical Momentum Shifts Amid Mixed Market Signals

Sun Pharmaceutical began the week with a notable shift in its technical momentum, moving from a mildly bearish stance to a sideways trend. The stock closed at Rs.1,628.90, up 2.13% on the day, while the Sensex declined 1.03% to 35,814.09. This divergence highlighted the stock’s relative strength despite mixed technical indicators such as a bearish MACD on weekly charts and neutral RSI readings. The stock traded within a moderate intraday range, signalling consolidation after recent volatility.

Daily moving averages edged into mildly bullish territory, suggesting short-term positive momentum, although longer-term oscillators like the Know Sure Thing (KST) remained bearish. Volume trends and Dow Theory assessments showed no clear directional confirmation, indicating cautious investor sentiment. The stock’s position between its 52-week low of Rs.1,547.25 and high of Rs.1,850.95 underscored a consolidation phase within a broad trading range.

3 February 2026: Intraday High and Gap Up Signal Renewed Strength

On 3 February, Sun Pharmaceutical demonstrated robust price action, opening with a significant 5.41% gap up to Rs.1,702.80 and reaching an intraday high of Rs.1,725, a 5.9% increase from the previous close. The stock closed with a strong gain of 4.54%, outperforming the Sensex’s 2.63% rise and the Pharmaceuticals & Biotechnology sector’s 2.66% advance. This marked the fourth consecutive day of gains, cumulatively delivering a 6.48% return over this period.

Technically, the stock traded above its 5-day and 20-day moving averages, signalling short-term bullishness, though it remained below longer-term averages such as the 50-day and 100-day, indicating resistance ahead. The gap up and sustained buying momentum reflected positive market sentiment despite broader market volatility. The stock’s relative outperformance within its sector highlighted its leadership amid defensive and growth-oriented healthcare stocks.

3 February 2026: Surge in Call Option Activity Reflects Bullish Sentiment

Alongside the strong price gains on 3 February, Sun Pharmaceutical saw a significant surge in call option trading, particularly for the 24 February 2026 expiry series. The Rs.1,700 strike call option attracted 8,200 contracts with a turnover of Rs.4.83 crores and an open interest of 3,594 contracts, indicating strong investor positioning for a potential breakout above this key resistance level.

The underlying stock closed near Rs.1,689.70, just below the Rs.1,700 strike, reinforcing expectations of upward price movement. Despite the rally, the weighted average traded price was closer to the day’s low, suggesting some profit-taking or cautious buying at elevated levels. The stock’s trading above its 5-day, 20-day, and 200-day moving averages signals short- and long-term bullish trends, although resistance remains near the 50-day and 100-day averages.

Sector-wide gains of 2.81% on the day were outpaced by Sun Pharma’s 3.80% return, underscoring its leadership within the Pharmaceuticals & Biotechnology industry. However, delivery volumes declined by 33.35% compared to the five-day average, hinting at some short-term profit booking or cautious positioning ahead of upcoming events.

4–6 February 2026: Consolidation and Slight Pullback

Following the strong gains on 3 February, the stock’s price stabilised with minor fluctuations. On 4 February, Sun Pharma closed marginally higher at Rs.1,704.00 (+0.07%), supported by a surge in volume to 695,926 shares. The Sensex also advanced modestly by 0.37% to 36,890.21, reflecting a generally positive market mood.

On 5 February, the stock slipped slightly by 0.10% to Rs.1,702.30 on lower volume, while the Sensex declined 0.53%. The following day, 6 February, saw a further modest decline of 0.45% to Rs.1,694.70 on very thin volume, as the Sensex inched up 0.10%. This minor pullback after a strong rally is consistent with profit-taking and consolidation near resistance levels.

Key Takeaways from the Week

Positive Signals: Sun Pharmaceutical’s 6.25% weekly gain notably outpaced the Sensex’s 1.51% rise, reflecting strong relative strength. The stock’s technical momentum shifted from bearish to sideways early in the week, with short-term moving averages turning bullish. The significant gap up and intraday high on 3 February demonstrated renewed buying interest and resilience amid broader market volatility. Heavy call option activity at the Rs.1,700 strike price indicates bullish investor positioning ahead of the February expiry, suggesting expectations of further upside.

Cautionary Notes: Despite short-term strength, longer-term technical indicators such as weekly MACD and KST oscillators remain bearish or neutral, signalling that the rally may face resistance. The stock remains below key medium- and long-term moving averages, including the 50-day and 100-day, which could limit sustained gains. Declining delivery volumes and profit-taking near recent highs suggest some investor caution. The downgrade to a Hold rating and Mojo Score of 62.0 reflects a balanced outlook amid mixed signals.

Conclusion: Consolidation with Bullish Momentum Amid Mixed Technicals

Sun Pharmaceutical Industries Ltd’s week was characterised by a strong price rally supported by technical momentum shifts, a robust gap up, and heightened derivatives activity. The stock’s outperformance relative to the Sensex and its sector underscores its leadership and resilience in a volatile market environment. However, mixed technical indicators and resistance near medium-term averages counsel prudence.

Investors should monitor key technical levels, particularly the Rs.1,700 resistance and the 52-week high near Rs.1,850, for signs of sustained breakout or consolidation. The concentrated call option interest ahead of the 24 February expiry adds a layer of potential volatility and directional cues. Overall, Sun Pharma remains in a consolidation phase with cautiously optimistic momentum, balancing short-term gains against longer-term technical challenges.

Unlock special upgrade rates for a limited period. Start Saving Now →