Watch out for This Steel Producer: SAIL Forming a Consolidation Base!!

Steel Authority stock is worth watching as the stock is forming a 12-week, 23% deep Consolidation Base. The current price is only 14% away from its ideal buy price of INR 151. Aggressive investors could use any tight area breakout inside the base as an opportunity to initiate a small position. A conservative approach may be to add the stock to your watchlist so that you are ready to pounce if it breaks out to the traditional 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 2.86% away from the 10-week moving average.

 

Steel Authority has been an outperforming stock as compared to the broader market. It has a strong Relative Strength Rating of 85. In the last twelve months, the stock has rallied over 281.2% as compared to 44.8% for the Nifty500.

 

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. If Steel Authority can maintain this outperformance, it could make sense as a CANSLIM trade.

 

Steel Authority stock has 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, Steel Authority has an excellent EPS Rank of 92, which indicates consistency in earnings. The earnings and sales for the stock have grown by 48% and 1%, respectively over the past three years. Its 3-years earnings stability is 99, on a 0 to 99 scale (lower the better). Over the past five years, the earnings and sales for the stock have grown by 48% and 11%, respectively. The 5-years earnings stability is 99. The return on equity for the last reported year is 10%.

 

The current price of Steel Authority is -14% off from its 52-week high price and 299% above its 52-week low price. The stock belongs to the industry group of Steel-Producers, which is exhibiting excellent strength in the current market environment. The current industry group rank is 30.

 

The stock appears on our idea lists: Minervini Trend Template.

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