Mumbai: Sun Pharmaceuticals may be on the verge of a technical breakout that could drive the stock up by another 20 per cent in the near-term. With investors favouring defensives, such as technology and pharma, these days in the wake of the resurgent coronavirus, analysts expect the stock to cross a crucial hurdle of Rs 653. The stock, which attempted to cross this level on Tuesday, ended at Rs 643, up 0.4 per cent.Technical analysts say charts are flashing a bullish outlook for Sun Pharma shares.“Sun Pharma is close to staging a consolidation range breakout with key resistance placed at Rs 653,” said Sandeep Porwal, technical analyst, Ashika Stock Broking. “Sustenance above the overhead resistance of Rs 653 will result in a rally towards the level of Rs 730 and Rs 760.”Though the company has insignificant exposure to drugs for Covid-19, analysts remain bullish about business prospects.82172217“Sun’s domestic business is expected to continue to outperform the broader market, despite no meaningful Covid contribution, aided by a strong launch momentum,” said Anmol Ganjoo, analyst, JM Financial. “With Sun completing its domestic field force expansion exercise last year, the company remains well-positioned to continue to outperform the broader market given its leadership position in high-growth chronic therapies.”Sun shares have risen 11.8 per cent in less than a month. The stock is well placed above its 20, 50, 100- and 200-day moving averages, suggesting a bullish trend. The run-up in the stock price along with volume suggest a rally in the offing, said technical analysts.“On the weekly chart, the stocks have witnessed a ‘V’ shape recovery, indicating strong buying momentum at lower levels,” said Rajesh Palvia, head of technicals, Axis Securities. “The weekly and monthly strength indicator RSI are in bullish mode and quoting above the 50 mark signaling rising strength on short to medium term charts,” he added.Sun’s valuations are below long-term averages despite regulatory uncertainties receding. At 25 times FY22 estimated earnings, Sun Pharma is currently trading at 34 per cent discount to its 5-year average Price to Earnings (PE) ratio. “Sun’s PE multiple will improve on the back of changing business mix in the US while we expect its domestic franchise to continue to roll at a decent pace, adding further comfort to valuation,” Amey Chalke, analyst, Haitong International.