Bajaj Finance stock is worth watching as the stock is forming a 12-week, 25% deep Consolidation Base. The current price is only 4% away from its ideal buy price of INR 5822. 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 7.35% away from the 10-week moving average.
In the last twelve months, Bajaj Finance has rallied nearly 135.2% as compared to 49.1% for the Nifty500. It has a Relative Strength Rating of 77. 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 few weeks. The overall long term trend of the line is also trending upward. If Bajaj Finance can maintain this outperformance, it could make sense as a CANSLIM trade.
Another key part of the jigsaw is institutional sponsorship. Bajaj Finance 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, Bajaj Finance has an excellent EPS Rank of 90, which indicates consistency in earnings. The earnings and sales for the stock have grown by 19% and 33%, respectively over the past three years. Its 3-years earnings stability is 18, on a 0 to 99 scale (lower the better). Over the past five years, the earnings and sales for the stock have grown by 30% and 34%, respectively. The 5-years earnings stability is 16. The return on equity for the last reported year is 13%.
The stock belongs to the industry group of Finance-Consumer Loans, which is exhibiting a fair amount of strength in the current market environment. The current industry group rank is 68. The current price of Bajaj Finance is -4% off from its 52-week high price and 214% above its 52-week low price.
The stock appears on our idea list:Trend Template – 5 Months.