This Long Term Leader Is Trading Near A Buy Point: Divi's Lab

Posted Date: April 26 2021
Divi's Lab Stock
Divi's Lab stock has cleared a 13-week, 19% deep Double Bottom Base two weeks ago. However, the stock didn’t move much and started forming a very tight price action for the last eight trading sessions. Currently, the stock is trading around just -3% away from its ideal buy price of INR 3888. The stock is worth watching at the current price level.
 
 
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 5.1% away from the 10-week moving average.
 
In the last twelve months, Divi's Lab has rallied nearly 55.8% as compared to 56.8% for the Nifty500. It has a Relative Strength Rating of 61. 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 five weeks. The overall long term trend of the line is also trending upward. If Divi's Lab can maintain this outperformance, it could make sense as a CANSLIM trade.
 
On the earnings front, Divi's Lab has an excellent EPS Rank of 90, which indicates consistency in earnings. The earnings and sales for the stock have grown by 26% and 20%, respectively over the past three years. Its 3-years earnings stability is 8, on a 0 to 99 scale (lower the better). Over the past five years, the earnings and sales for the stock have grown by 11% and 12%, respectively. The 5-years earnings stability is 14. The return on equity for the last reported year is 19%.
 
The stock belongs to the industry group of Medical-Generic Drugs. 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 Divi's Lab is -3% off from its 52-week high price and 81% above its 52-week low price.
The stock appears on our idea lists: Trend Template - 5 Months,

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