Divi's Lab stock has broken out of a 13-week, 19% deep Double Bottom Base 4-weeks ago. However, the stock is still worth watching as the current price is only 3% away from the ideal buy price of INR 3888.
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 7.4% away from the 10-week moving average.
In the last twelve months, Divi's Lab has rallied nearly 72.2% as compared to 61.1% for the Nifty500. It has a Relative Strength Rating of50. 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 Divi's Lab can maintain this outperformance, it could make sense as a CANSLIM trade.
On the earnings front, Divi's Lab has an excellent EPS Rank of89, which indicates consistency in earnings. The earnings and sales for the stock have grown by 26% and 20%, 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 11% and 12%, respectively. The 5-years earnings stability is 14. The return on equity for the last reported year is 19%.
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 64. The current price of Divi's Lab is -3% off from its 52-week high price and 95% above its 52-week low price.
The stock appears on our idea lists: Trend Template - 5 Months.