CESC stock has cleared a 8-week, 17% deep Cup Without Handle Base this week. Currently, the stock is trading around just -2% away from its ideal buy price of INR 87. The stock is offering investors an opportunity to get on board at the current price.
The stock ended the week on a bearish note. It closed 8.79% up on a 2.0% lower volume than the 10-week average. You want to see a strong close on heavy volume like this before initiating a position. That signals institutional buying. You would also want to see the same price volume momentum to continue in the coming weeks.
The key trend lines, 10 and 40-week moving averages are at a comfortable position. The current trends of both the averages are upward and the 10-week moving average is trending above the 40-week moving average. The current price of the stock is trading around 4.39% away from the 10-week moving average.
In the last twelve months, CESC has rallied nearly 36.5% as compared to 53.4% for the Nifty500. It has a Relative Strength Rating of 43. We definitely would like to see improvement in the rating. At this point we are taking a step back and focusing on the RS Line.
The Relative Strength Line of the stock is offering a lot of encouragement to investors. It has been making good progress in the last four weeks. The overall long term trend of the line is also trending upward. If CESC can maintain this outperformance, it could make sense as a CANSLIM trade.
CESC stock has strong institutional support. The Accumulation/Distribution Rating of 'A-' represents heavy institutional buying over the past 13 weeks. Although the shares held by institutions dropped in the last quarter, the number of institutions holding the stock increased at the same time. This shows increasing interest among the institutions.
On the earnings front, CESC has an excellent EPS Rank of 87, which indicates consistency in earnings. The earnings and sales for the stock have grown by 8% and 3%, respectively over the past three years. Its 3-years earnings stability is 5, on a 0 to 99 scale (lower the better). Over the past five years, the earnings and sales for the stock have grown by 17% and 5%, respectively. The 5-years earnings stability is 9. The return on equity for the last reported year is 14%.
The stock belongs to the industry group of Utility-Electric Power, which is exhibiting a fair amount of strength in the current market environment. The current industry group rank is 53. The current price of CESC is -12% off from its 52-week high price and 54% above its 52-week low price.