Kennametal India stock has broken out of a 11-week, 20% deep Consolidation Base 4-weeks ago. However, the stock is still worth watching as the current price is only 0% away from the ideal buy price of INR 1440.
The stock closed in red for the week, but on a lower volume. It was down -0.50% on a -53% lower 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 4.0% away from the 10-week moving average.
In the last twelve months, Kennametal India has rallied nearly 83.8% as compared to 53.4% for the Nifty500. It has a Relative Strength Rating of 55. 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 RS Line remains in a downtrend for the last four weeks. However, this is not unusual for a leading stock as the stock sets up base for its next leg up or at the very beginning of a new trend. At this point, the overall long term trend of the line is upward. If Kennametal India can maintain a healthy upward move, it could make sense as a CANSLIM trade.
On the earnings front, Kennametal India has an excellent EPS Rank of 55, which indicates consistency in earnings. The earnings and sales for the stock have seen de-growth of -21% and --6%, respectively over the past three years. Its 3-years earnings stability is 43, on a 0 to 99 scale (lower the better). Over the past five years, the earnings and sales for the stock have grown by 19% and 6%, respectively. The 5-years earnings stability is 56. The return on equity for the last reported year is 13%.
The stock belongs to the industry group of Machinery-Gen Industrial. You would still want to see some improvement in the industry group rank for the group. The current industry group rank is 82. The current price of Kennametal India is -6.0% off from its 52-week high price and 92.0% above its 52-week low price.
The stock appears on our idea lists: Minervini Trend Template.