RAINBOW - Swing Trade Analysis with AI Signals

Last Updated Time : 19 Sept 25, 2:15 pm

Swing Trade Rating: 3.2

📊 Swing Trade Analysis: Rainbow Children's Medicare Ltd (RAINBOW)

RAINBOW is currently in a technically weak phase, despite solid fundamentals. The stock is trading near long-term support, which may attract contrarian swing traders, but momentum indicators suggest caution and the need for confirmation before entry.

✅ Strengths

Fundamental Quality

ROCE: 18.3% and ROE: 16.7% → Strong operational and financial efficiency.

EPS: ₹24.7 and PAT Qtr: ₹51.7 Cr. → Consistent earnings.

Debt-to-Equity: 0.49 → Moderate leverage.

Qtr Profit Var: +33.5% → Positive growth trajectory.

Valuation Context

P/E: 58.9 vs Industry PE: 57.3 → Fairly valued within sector.

PEG Ratio: 3.31 → Slightly expensive, but not extreme.

Technical Support Zone

Current price ₹1,452 is near DMA200 (₹1,446), offering potential bounce support.

⚠️ Weaknesses

Technical Indicators

RSI: 34.1 → Approaching oversold, but no reversal signal yet.

MACD: -18.9 → Strong bearish momentum.

Price below DMA50 (₹1,498) → Short-term downtrend.

Volume Weakness

Current volume (44.8K) < 1-week average (1.29L) → Weak trading interest.

Institutional Sentiment

FII Holding ↓ 0.09% → Mild foreign investor pullback.

Low Dividend Yield: 0.21% → Minimal passive income.

🎯 Optimal Entry Price

Buy Zone: ₹1,420–₹1,440

Near DMA200 and oversold territory. Entry should be timed with MACD crossover or RSI uptick.

🚪 Exit Strategy (If Holding)

Target Exit: ₹1,520–₹1,550

Near DMA50 and short-term resistance.

Stop Loss: ₹1,400

Below recent support to manage downside risk.

This setup suits technically patient traders who wait for a reversal signal before entering. Let me know if you'd like help tracking MACD or RSI signals for timing your entry.

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