Grasim Industries stock has cleared a 6-week, 11% deep Flat Base this week. Currently, the stock is trading around just 1.0% away from its ideal buy price of INR 1614. The stock is worth watching at the current price level.
The stock ended the week on a negative note. It closed 4.67% down on a 10% higher volume than the 10-week average. You want to see a strong close on heavy volume before initiating a position. That signals institutional buying. But do not conclude anything just based on this week’s action. A prudent approach would be to watch the price volume momentum in the coming trading sessions.
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 2.10% away from the 10-week moving average.
In the last twelve months, Grasim Industries has rallied nearly 110.6% as compared to 53.4% for the Nifty500. It has a Relative Strength Rating of 56. 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 Grasim Industries can maintain this outperformance, it could make sense as a CANSLIM trade.
Grasim Industries 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, Grasim Industries has an excellent EPS Rank of 84, which indicates consistency in earnings. The earnings and sales for the stock have grown by 34% and 5%, respectively over the past three years. Its 3-years earnings stability is 20, on a 0 to 99 scale (lower the better). Over the past five years, the earnings and sales for the stock have grown by 1% and 20%, respectively. The 5-years earnings stability is 33. The return on equity for the last reported year is 7%.
The stock belongs to the industry group of Bldg-Constr Prds/Misc. You would still want to see some improvement in the industry group rank for the group. The current industry group rank is 128. The current price of Grasim Inds. is -4% off from its 52-week high price and 123% above its 52-week low price.
The stock appears on our idea lists: Minervini Trend Template