Breakout of a Consolidation Base – Lal Pathlabs
Company Overview
The company operates in the business of diagnostic and related health care tests in India. It has robust national network consisting of National Reference Laboratory in New Delhi with 190+other clinical or medical laboratories, 1700+ lab patient service centers, and 5000+ pickup points with the widest test menu of more than 4500 tests and panel. The company’s nationwide network includes metropolitan areas such as New Delhi, Mumbai, Bengaluru, Chennai, Hyderabad and Kolkata.
Growth Drivers:
• Untapped growth potential of health care industry
• Robust operating metrics to drive growth momentum
• Health cash balance and fixed asset turnover
The path ahead:
The company is looking forward to best fit organic opportunities for top-line growth. Further, the company targets to grow ahead of peers backed by strongly developing rest of India geographies, through Kolkata National Laboratory coupled with cluster city approach for attractive markets. Further, higher education from bundling of test, “Swash Fit”, is expected to keep growth momentum intact for company.
Price Action Analysis:
The stock witnessed a breakout from the consolidation base on 13th July 2020 on strong volume and recorded a new high at 2029. The length of the consolidation base was of 22 weeks with a depth of 35.34 percent. After a making a new high at 2029 however price staged a reversal and corrected in the next three trading sessions to the prior resistance zone on lower volume compared to the volume at the time of breakout. Often, support and resistance reverses their roles once price action witness a valid break. If the price goes up through resistance by a good way, then that resistance level becomes a support level when the price comes back down. Better known as Reversal of Roles. On a weekly time frame price action formed a Bullish SKR price bar. With a bullish SKR price bar we form a Bullish Expectation. The confirmation for the bullish expectation will be confirmed only when price breaks the high of the Bullish SKR at 1920. The Bullish expectation will be invalidated if price breaks the low of the Bullish SKR price bar at 1815.
Trade Decsion
Holding Period: 3 to 6 Months | Buy Entry Zone: Above 1920 to 1970 | Initial Stop- Loss: 1800 | Potential Measured Move: 2100 to 2160 | Risk on Initial Capital: 6.25% | Expected Returns: 9.4 to 12.5% |
Disclaimer
All investment ideas published are for educational purpose. Investment decisions involve risk, and the past performance of a security, industry, sector, market, financial product, trading strategy, or individual’s trading does not guarantee future results or returns. Investors are fully responsible for any investment decisions they make. Such decisions should be based solely on an evaluation of their financial circumstances, investment objectives, risk tolerance, and liquidity needs.
The company operates in the business of diagnostic and related health care tests in India. It has robust national network consisting of National Reference Laboratory in New Delhi with 190+other clinical or medical laboratories, 1700+ lab patient service centers, and 5000+ pickup points with the widest test menu of more than 4500 tests and panel. The company’s nationwide network includes metropolitan areas such as New Delhi, Mumbai, Bengaluru, Chennai, Hyderabad and Kolkata.
Growth Drivers:
• Untapped growth potential of health care industry
• Robust operating metrics to drive growth momentum
• Health cash balance and fixed asset turnover
The path ahead:
The company is looking forward to best fit organic opportunities for top-line growth. Further, the company targets to grow ahead of peers backed by strongly developing rest of India geographies, through Kolkata National Laboratory coupled with cluster city approach for attractive markets. Further, higher education from bundling of test, “Swash Fit”, is expected to keep growth momentum intact for company.
Price Action Analysis:
The stock witnessed a breakout from the consolidation base on 13th July 2020 on strong volume and recorded a new high at 2029. The length of the consolidation base was of 22 weeks with a depth of 35.34 percent. After a making a new high at 2029 however price staged a reversal and corrected in the next three trading sessions to the prior resistance zone on lower volume compared to the volume at the time of breakout. Often, support and resistance reverses their roles once price action witness a valid break. If the price goes up through resistance by a good way, then that resistance level becomes a support level when the price comes back down. Better known as Reversal of Roles. On a weekly time frame price action formed a Bullish SKR price bar. With a bullish SKR price bar we form a Bullish Expectation. The confirmation for the bullish expectation will be confirmed only when price breaks the high of the Bullish SKR at 1920. The Bullish expectation will be invalidated if price breaks the low of the Bullish SKR price bar at 1815.
Trade Decsion
Holding Period: 3 to 6 Months | Buy Entry Zone: Above 1920 to 1970 | Initial Stop- Loss: 1800 | Potential Measured Move: 2100 to 2160 | Risk on Initial Capital: 6.25% | Expected Returns: 9.4 to 12.5% |
Disclaimer
All investment ideas published are for educational purpose. Investment decisions involve risk, and the past performance of a security, industry, sector, market, financial product, trading strategy, or individual’s trading does not guarantee future results or returns. Investors are fully responsible for any investment decisions they make. Such decisions should be based solely on an evaluation of their financial circumstances, investment objectives, risk tolerance, and liquidity needs.
Trade active:
Price Crossed above the Entry Zone of 1920. Follow the Trade Decision.
