Rain Industries: Breaks Out From A 7-week Cup with Handle Pattern

Posted Date: May 19 2021

Rain Industries stock has broken out of a 7-week, 22% deep Cup With Handle Base 3-weeks ago. However, the stock is still worth watching as the current price is only 1% away from the ideal buy price of INR 175.

 

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 6.94% away from the 10-week moving average.

 

In the last twelve months, Rain Industries has rallied nearly 154% as compared to 61.1% for the Nifty500. It has a Relative Strength Rating of 74. 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 Rain Industries can maintain a healthy upward move, it could make sense as a CANSLIM trade.

 

Rain Industries stock has strong institutional support. The Accumulation/Distribution Rating of 'A-' represents heavy institutional buying over the past few 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, Rain Industries has an excellent EPS Rank of 89, which indicates consistency in earnings. The earnings and sales for the stock have seen de-growth of -13% and --7%, respectively over the past three years. Its 3-years earnings stability is 24, on a 0 to 99 scale (lower the better). Over the past five years, the earnings and sales for the stock have grown by 8% and 4%, respectively. The 5-years earnings stability is 41. The return on equity for the last reported year is 11%.

 

The current price of Rain Industries is -8% off from its 52-week high price and 189% above its 52-week low price. The stock belongs to the industry group of Mining-Metal Ores, which is exhibiting excellent strength in the current market environment. The current industry group rank is 5.

 

The stock appears on our idea lists: Trend Template - 5 Months.

 
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