Garware Technical: A Long Term Leader of Apparel Cloth Mfg. Forming Higher Highs

Garware Technical Fibres stock has broken out of a 9-week, 18% deep Cup With Handle Base 3-weeks ago. However, the stock is still worth watching as the current price is only 6% away from the ideal buy price of INR 2735.

The stock ended the week on a negative note. It closed -1.07% down on a 33% higher volume than the 10-week average. You want to see a strong close on heavy volume before initiating a position. That signals institutional buying. But do not conclude anything just based on this week’s action. A prudent approach would be to watch the price volume momentum in the coming trading sessions.

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 7.15 % away from the 10-week moving average.

In the last twelve months, Garware Technical Fibres has rallied nearly 96.8% as compared to 60.8% for the Nifty500. It has a Relative Strength Rating of 57. 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 four weeks. The overall long term trend of the line is also trending upward. If Garware Technical Fibres can maintain this outperformance, it could make sense as a CANSLIM trade.

Garware Technical Fibres stock has strong institutional support. The Accumulation/Distribution Rating of ‘B+’ represents heavy institutional buying over the past few 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, Garware Tech. Fibres has an excellent EPS Rank of 89, which indicates consistency in earnings. The earnings and sales for the stock have grown by 12% and 1%, respectively over the past three years. Its 3-years earnings stability is 6, on a 0 to 99 scale (lower the better). Over the past five years, the earnings and sales for the stock have grown by 19% and 5%, respectively. The 5-years earnings stability is 8. The return on equity for the last reported year is 20%.

The stock belongs to the industry group of Apparel-Clothing Mfg, which is exhibiting a fair amount of strength in the current market environment. The current industry group rank is 42. The current price of Garware Technical Fibres is -2% off from its 52-week high price and 123% above its 52-week low price.

The stock appears on our idea lists: Trend Template - 5 Months
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Disclaimer: Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. It is for educational purposes only.