This Two Stocks from Building Materials Are Forming Bases: Kajaria Ceramics And Cera Sanitaryware

Posted Date: May 04 2021

Kajaria Ceramics stock is forming a 8-week, 17% deep Double Bottom base. The current price is only 6% away from its ideal buy price of INR 990. This is a bullish sign, but the current price of the stock is still below the 10-week moving average. A prudent approach would be to add the stock to your watchlist. This means you can be ready to pounce as the stock moves above the 10-wma line and breaks out to the ideal entry point.

 

The current trend of the 10-week moving average is still downward. However, if we look at a bigger picture, the long term average (40-week moving average) is in an uptrend. The 10-week moving average is above the trending 40-week moving average. The stock is trading around -0.7% away from the 10-week moving average.

 

In the last twelve months, Kajaria Ceramics has rallied nearly 143.7% as compared to 49.1% for the Nifty500. It has a Relative Strength Rating of 80. 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 recent 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 Kajaria Ceramics can maintain a healthy upward move, it could make sense as a CANSLIM trade.

 

Another key part of the jigsaw is institutional sponsorship. Kajaria Ceramics has an Accumulation/Distribution Rating of 'B+'. This represents heavy institutional buying over the past 13 weeks. The number of institutional sponsors and shares held by the sponsors, both increased in the last reported quarter.

 

On the earnings front, Kajaria Ceramics has a respectable EPS Rank of 77, which is okay but needs improvement. The earnings and sales for the stock have seen de-growth of -8% and -3%, respectively over the past three years. Its 3-years earnings stability is 14, on a 0 to 99 scale (lower the better). Over the past five years, the earnings and sales for the stock have grown by 6% and 2%, respectively. The 5-years earnings stability is 27. The return on equity for the last reported year is 15%.

 

The current price of Kajaria Ceramics is -9% off from its 52-week high price and 214% above its 52-week low price. The stock belongs to the industry group of Bldg-Constr Prds/Misc, which is exhibiting excellent strength in the current market environment. The current industry group rank is 32.

 

Cera Sanitaryware Stock

Cera Sanitaryware stock is forming a 9-week, 14% deep Flat Base. The current price is only 7% away from its ideal buy price of INR 4200. This is a bullish sign, but the current price of the stock is still below the 10-week moving average. A prudent approach would be to add the stock to your watchlist. This means you can be ready to pounce as the stock moves above the 10-wma line and breaks out to the ideal 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 -0.1% away from the 10-week moving average.

 

In the last twelve months, Cera Sanitaryware has rallied nearly 74.7% as compared to 49.1% for the Nifty500. It has a Relative Strength Rating of 69. 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 recent weeks. The overall long term trend of the line is also trending upward. If Cera Sanitaryware can maintain this outperformance, it could make sense as a CANSLIM trade.

 

Cera Sanitaryware stock has a strong institutional support. The Accumulation/Distribution Rating of 'A-' 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, Cera Sanitaryware has an EPS Rank of 59, which is okay but fails to impress a growth stock investor. The earnings and sales for the stock have seen de-growth of -2% and --2%, 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 3% and 6%, respectively. The 5-years earnings stability is 9. The return on equity for the last reported year is 15%.

 

The current price of Cera Sanitaryware is -7% off from its 52-week high price and 86% above its 52-week low price. The stock belongs to the industry group of Bldg-Constr Prds/Misc, which is exhibiting excellent strength in the current market environment. The current industry group rank is 32.

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