Radico Khaitan Ltd stock has cleared a 12-week, 24% deep Cup Without Handle Base this week. Currently, the stock is trading around just 12% away from its ideal buy price of INR 650. The stock is offering investors an opportunity to get on board at the current price.
The stock ended the week on a bullish note. It closed 6.2% up on a 261% greater 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 25.14% away from the 10-week moving average.
In the last twelve months, Radico Khaitan Lt. has rallied nearly 87.6% as compared to 55.6% for the Nifty500. It has a Relative Strength Rating of 57. 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 Radico Khaitan Ltd. can maintain this outperformance, it could make sense as a CANSLIM trade.
Another key part of the jigsaw is institutional sponsorship. Radico Khaitan Ltd. has an Accumulation/Distribution Rating of 'A'. This represents heavy institutional buying over the past few weeks. The number of institutional sponsors and shares held by the sponsors, both increased in the last reported quarter.
On the earnings front, Radico Khaitan Ltd. has an excellent EPS Rank of 98, which indicates consistency in earnings. The earnings and sales for the stock have grown by 24% and 9%, respectively over the past three years. Its 3-years earnings stability is 11, on a 0 to 99 scale (lower the better). Over the past five years, the earnings and sales for the stock have grown by 33% and 9%, respectively. The 5-years earnings stability is 12. The return on equity for the last reported year is 17%.
The stock belongs to the industry group of Beverages-Alcoholic. You would still want to see some improvement in the industry group rank for the group. The current industry group rank is 119. The current price of Radico Khaitan Ltd. is -2% off from its 52-week high price and 126% above its 52-week low price.
The stock appears on our idea lists: Minervini Trend Template.