Gail (India) Ltd Stock Is Nearing A Buy Point

Posted Date: May 06 2021

Gail (India) Ltd stock is worth watching as the stock is forming a 9-week, 19% deep Cup Without Handle Base. The current price is only 4% away from its ideal buy price of INR 158. Aggressive investors could use any tight area breakout inside the base as an opportunity to initiate a small position. A conservative approach may be to add the stock to your watchlist so that you are ready to pounce if it breaks out to the traditional entry point.

 

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 8.01% away from the 10-week moving average.

 

In the last twelve months, Gail (India) Ltd has rallied nearly 58.8% as compared to 58.7% for the Nifty500. It has a Relative Strength Rating of 64. 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 Gail (India) Ltd can maintain this outperformance, it could make sense as a CANSLIM trade.

 

Gail (India) Ltd stock has a strong institutional support. The Accumulation/Distribution Rating of 'A+' represents heavy institutional buying over the past  few 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, Gail (India) Ltd has an excellent EPS Rank of 84, which indicates consistency in earnings. The earnings and sales for the stock have grown by 25% and 5%, respectively over the past three years. Its 3-years earnings stability is 10, on a 0 to 99 scale (lower the better). Over the past five years, the earnings and sales for the stock have grown by 40% and 8%, respectively. The 5-years earnings stability is 17. The return on equity for the last reported year is 20%.

 

The current price of Gail (India) Ltd is -4% off from its 52-week high price and 88% above its 52-week low price. The stock belongs to the industry group of Utility-Gas Distribution, which is exhibiting excellent strength in the current market environment. The current industry group rank is 1.

 

The stock appears on our idea lists: Trend Template -5 Months

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Disclaimer: Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. It is for educational purposes only.For more information, see our Legal disclosures here.
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