Hindalco Indus. stock has broken out of a 11-week, 16% deep Consolidation Base 2-weeks ago. However, the stock is still worth watching as the current price is only 2% away from the ideal buy price of INR 428.
The stock closed in red for the week, but on a lower volume. It was down -0.6% on a -0.6% 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 8.65% away from the 10-week moving average.
In the last twelve months, Hindalco Indus. has rallied nearly 136.1% as compared to 46.3% for the Nifty500. It has a Relative Strength Rating of 67. 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. Hindalco Indus. can maintain this outperformance, it could make sense as a CANSLIM trade.
Hindalco Indus. stock has a strong institutional support. The Accumulation/Distribution Rating of 'B' 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, Hindalco Indus. has an excellent EPS Rank of 91, which indicates consistency in earnings. The sales for the stock have grown by 2% over the past three years; however the earnings growth remained muted at -22%. Its 3-years earnings stability is 50, on a 0 to 99 scale (lower the better). Over the past five years, the earnings and sales for the stock have grown by 23% and 6%, respectively. The 5-years earnings stability is 99. The return on equity for the last reported year is 8%.
The stock belongs to the industry group of Metal Proc & Fabrication, which is exhibiting a fair amount of strength in the current market environment. The current industry group rank is 42. The current price of Hindalco Indus. is -8% off from its 52-week high price and 183% above its 52-week low price.
The stock appears on our idea lists: Growth 50, Minervini Trend Template.