Sonata Software stock is worth watching as the stock is forming a 6-week, 13% deep Flat Base. The current price is only 5% away from its ideal buy price of INR 634. 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 15.55% away from the 10-week moving average.
In the last twelve months, Sonata Software has rallied nearly 189.4% as compared to 59.6% for the Nifty500. It has a Relative Strength Rating of 84. We definitely would like 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 few weeks. The overall long term trend of the line is also trending upward. If Sonata Software can maintain this outperformance, it could make sense as a CANSLIM trade.
Another key part of the jigsaw is institutional sponsorship. Sonata Software 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, Sonata Software has an excellent EPS Rank of 80, which indicates consistency in earnings. The earnings and sales for the stock have grown by 7% and 22%, 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 13% and 17%, respectively. The 5-years earnings stability is 10. The return on equity for the last reported year is 31%.
The stock belongs to industry group of Computer-Tech Services. You would still want to see some improvement in the industry group rank for the group. The current industry group rank is 75. The current price of Sonata Software is 2% off from its 52-week high price and 241% above it 52-week low price.
The stock appears on our idea lists: Trend Template - 5 Months.