Cipla stock has broken out of a 8-week, 16% deep Cup Without Handle Base 3-weeks ago. However, the stock is still worth watching as the current price is only 4% away from the ideal buy price of INR 879.
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 8% away from the 10-week moving average.
In the last twelve months, Cipla has rallied nearly 54.4% as compared to 51.1% for the Nifty500. It has a Relative Strength Rating of 51. 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 recent weeks. The overall long term trend of the line is also trending upward. If Cipla can maintain this outperformance, it could make sense as a CANSLIM trade.
Another key part of the jigsaw is institutional sponsorship. Cipla has an Accumulation/Distribution Rating of 'B'. This represents heavy institutional buying over the past 13 weeks. The number of institutional sponsors and shares held by the sponsors, both increased in the last reported quarter.
On the earnings front, Cipla has an excellent EPS Rank of 93, which indicates consistency in earnings. The earnings and sales for the stock have grown by 12% and 7%, respectively over the past three years. Its 3-years earnings stability is 8, on a 0 to 99 scale (lower the better). Over the past five years, the earnings and sales for the stock have grown by 10% and 7%, respectively. The 5-years earnings stability is 10. The return on equity for the last reported year is 10%.
The stock belongs to the industry group of Medical-Generic Drugs. You would still want to see some improvement in the industry group rank for the group. The current industry group rank is 84. The current price of Cipla is -6% off from its 52-week high price and 61% above its 52-week low price.