Month: May 2021

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Solara Active Pharma: Forming 27% Deep Cup Without Handle Base.

Solara Active Pharma stock is worth watching as the stock is forming a 11-week, 27% deep Cup Without Handle Base. The current price is only 1% away from its ideal buy price of INR 1625. 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 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 15.03% away from the 10-week moving average.

 

In the last twelve months, Solara Active Pharma has rallied nearly 159.6% as compared to 49.1% for the Nifty500. It has a Relative Strength Rating of 77.  We definitely would like 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 few weeks. The overall long term trend of the line is also trending upward. If Solara Active Pharma can maintain this outperformance, it could make sense as a CANSLIM trade.

 

Another key part of the jigsaw is institutional sponsorship. Solara  Active Pharma has an Accumulation/Distribution Rating of ‘A+’. 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, Solara Active Pharma has an EPS Rank of 55, which is okay but fails to impress a growth stock investor. The earnings and sales for the stock have grown by 80% and 6%, respectively over the past three years. Its 3-years earnings stability is 8, on a 0 to 99 scale (lower the better).  The return on equity for the last reported year is 11%.

 

The stock belongs to industry group of Medical-Diversified. You would still want to see some improvement in the industry group rank for the group. The current industry group rank is 86. The current price of Solara Active Pharma is -2% off from its 52-week high price and 258% above it 52-week low price.

 

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

 

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Indian Energy Exchange Stock Is Flirting With A Buy Zone.

 

 

 

 

 

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Indian Energy Exchange Stock Is Flirting With A Buy Zone.

Indian Energy Exchange stock is worth watching as the stock is forming a 7-week, 18% flat base pattern. The current price is only 2% away from its ideal buy price of INR 393. 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 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 10.38% away from the 10-week moving average.

 

Indian Energy Exchange has been an outperforming stock as compared to the broader market. It has a strong Relative Strength Rating of 86. In the last twelve months, the stock has rallied over 147.1% as compared to 49.1% 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 Indian Energy Exchange can maintain this outperformance, it could make sense as a CANSLIM trade.

 

Indian Energy Exchange 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, Indian Energy Exchange has an excellent EPS Rank of 88, which indicates consistency in earnings. The earnings and sales for the stock have grown by 13% and 6%, respectively over the past three years. Its 3-years earnings stability is 4, on a 0 to 99 scale (lower the better). Over the past five years, the earnings and sales for the stock have grown by 16% and 10%, respectively. The 5-years earnings stability is 4. The return on equity for the last reported year is 46%.

 

The stock belongs to the industry group of Financial Svcs-Specialty, which is exhibiting a fair amount of strength in the current market environment. The current industry group rank is 65.The current  price of Indian Energy Exchange is -3% off from its 52-week high price and 176% above its 52-week low price.

 

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

 

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SGX Nifty Indicates Positive Opening; Tata Consumer and Hero MotoCorp to Declare Q4 Results Today

At 8:00 am IST, SGX Nifty Futures was trading at 14,725, compared with Nifty’s close of 14,618 yesterday.

 

Market Pulse: Confirmed Uptrend

 

Distribution Day Count: Two

 

Global stock markets: Dow30, +0.3%; S&P 500, +0.1%; Nasdaq, -0.3%; Kospi, +0.8%; Nikkei, +2%

 

Yesterday, Nifty gapped higher and managed to hold gains. It advanced further in the last hour and closed near the day’s high. Volume was relatively low. Nifty also reclaimed its 21-DMA and is now trading less than 1% below its 50-DMA. The broader market was also in momentum. Nifty Next50 is now only about 2% below its all-time high. On the sectoral front, barring Nifty Realty (-1%), all other sectors closed in the green. Nifty Pharma (+4%) was the top gainer, followed by Nifty Bank (+1.5%). FIIs sold equities worth Rs 1,110 crore while DIIs sold shares worth Rs 240 crore.

 

Looking ahead, without trying to predict and decode stories, we will take what the market gives and continue to monitor unfolding conditions. If Nifty falls further and adds a couple of more distribution days, we may change the market status to an Uptrend Under Pressure. On the flip side, if Nifty reclaims its 50-DMA and moves higher, stocks that are breaking out of consolidation with higher relative strength and superior fundamentals can do well. Continue to trim or avoid ideas lagging and/or breaking down below major moving averages.

 

Key Results Today: ADANIPOWER, BLUESTARCO, HEROMOTOCO, SOLARA, TATACONSUM, and others.

 

Key News:

 

TATASTEEL’s Q4 FY21 results were in line with estimates. It reported PAT of Rs 6,644 crore compared with a loss of Rs 1,481 crore in Q4 FY20. Revenue grew 39% y/y to Rs 49,977 crore. Margin expanded 15% y/y to 28.4%.

 

LODHA’s Q4 FY21 sales bookings rose 72% y/y to Rs 2,013 crore. In Q4, it cut net debt by Rs 544 crore.

 

BAJFINANCE received approval from the Reserve Bank of India to launch a digital wallet.

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Key Highlights from RBI Governor’s Speech On May 05th 2021

  • Small finance banks on-lending to microfinance institutions (MFIs) would be considered as priority sector lending amid the ongoing COVID-19 pandemic till FY22 end.

 

  • Banks are incentivized to lend to weak sectors. They can create a COVID loan book in their balance sheets. An equal amount can be parked at the RBI with 40bps above reverse repo rate.

 

  • To support vaccine manufacturers, medical facilities, hospitals, and patients, on-tap liquidity of Rs 50k crore is set up and is open till FY22 end.

 

  • The second purchase of G-Sec for Rs 35,000 cr under G-SAP 1.0 will be conducted on May 20. G-SAP is contributing to softening of G-Sec yields, and in turn, private sector borrowing in the market.

 

  • Regarding inflation, the governor believes that it may not vary much with the projection made at its April monetary policy committee meeting. Normal monsoon should help contain food price pressures, especially in cereals and pulses. However, the inflation for the year would depend on the COVID restrictions and the impact on supply chains and logistics.

 

  • It also decided to conduct a special three-year long-term repo operation (SLTRO) of Rs 10,000 crore at repo rate for the SFBs. The amount is to be deployed for fresh lending of up to Rs 10 lakh per borrower. This facility will be available till October 31, 2021.

 

  • It announced relaxation in overdraft (OD) facility for state governments. The maximum number of days of OD in a quarter is increased from 36 to 50 days and the number of consecutive days of OD from 14 to 21 days.

 

  • Banks are allowed to utilize 100% of floating provisions/counter-cyclical provisioning buffer held by them as of December 31, 2020, for making specific provisions for NPAs with prior approval of their Boards. Utilization is permitted with immediate effect and up to FY22 end.

 

  • The global economy is exhibiting signs of recovery supported by fiscal and monetary stimulus. But the outlook is highly uncertain and clouded with risks. World merchandise trade has maintained its decent uptrend and global financial markets have regained buoyancy in April on the back of vaccine optimism.

 

Related Article:

India Fights Back with a Slew of Measures; Conducts a Large Vaccination Program

Bajaj Finance Stock Is Nearing its Buy Point

 

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Nifty Reclaims 21-DMA; Pharma and Banking Stocks Outperform

Today’s Action

 

Nifty, +0.8%; Sensex, +0.9%; Nifty Midcap, +1%; Nifty Smallcap, +0.4%; Model Portfolio, +1%

 

Market Pulse: Confirmed uptrend

 

Distribution Day Count: Two

 

Nifty gapped higher and managed to hold gains. In the last hour, it further moved higher and closed near day’s high. Volume was relatively lower. Today, Nifty reclaimed its 21-DMA and is now trading less than 1% below its 50-DMA. Broader market was also in momentum. Nifty Next50 is now only about 2% below its all-time high. The advance-decline ratio was in favor of advancers. Of the 2,250 stocks traded, 1,198 advanced, 627 declined, and the rest remained unchanged.

 

On the sectoral front, barring Nifty Realty (-1%), all other sectors closed in the green. Nifty Pharma (+4%) was the top gainer, followed by Nifty Bank (+1.5%). These were in momentum as RBI announced to provide immediate liquidity for ramping up COVID-19-related healthcare infrastructure and services by providing an on-tap liquidity window of Rs 50,000 crore with tenors of up to three years. Also, RBI opened a second window for the individual and small borrowers having loans up to Rs 25 crore for restructuring (if not availed earlier).

 

Looking ahead, without trying to predict and decode stories, we will take what the market gives and continue to monitor unfolding conditions. If Nifty falls further and adds a couple of more distribution days, we may change the market status to an Uptrend Under Pressure. On the flip side, if Nifty reclaims its 50-DMA and moves higher, stocks that are breaking out of consolidation with higher relative strength and superior fundamentals can do well. Continue to trim or avoid ideas lagging and/or breaking down below major moving averages.

 

Key News