RAINBOW - Swing Trade Analysis with AI Signals

Last Updated Time : 20 Dec 25, 07:01 am

Swing Trade Rating: 3.3

📊 Based on the given parameters, RAINBOW shows moderate potential for swing trading. The company has strong fundamentals with ROCE (18.3%) and ROE (16.7%), supported by DII inflows (+2.02%). However, the stock trades at a premium valuation (P/E 54.2 vs industry 51.8), with weak dividend yield (0.23%) and negative quarterly profit variation (-5.39%). Technical indicators (RSI 42.2, MACD -3.82) suggest cautious sentiment, though long-term fundamentals remain supportive.

💡 Optimal Entry Price: Around 1,280–1,300 ₹ (near support zone and below DMA 50).

🚪 Exit Strategy: If already holding, consider exiting near 1,360–1,380 ₹ resistance or on breakdown below 1,280 ₹.

✅ Positive

• 📈 Strong ROCE (18.3%) and ROE (16.7%)
• 📊 EPS at 24.3 ₹, supporting earnings base
• 📉 Debt-to-equity ratio at 0.46, manageable leverage
• 📈 DII holdings increased (+2.02%), showing domestic investor confidence

⚠️ Limitation

• 📉 High P/E ratio (54.2 vs industry 51.8)
• 📊 Weak dividend yield (0.23%)
• 📉 PEG ratio at 3.04, expensive growth valuation
• 📊 RSI at 42.2, near oversold zone with weak momentum

🚨 Company Negative News

• 📉 Decline in FII holdings (-1.75%)
• 📊 Quarterly PAT variation negative (-5.39%)

🌟 Company Positive News

• 📈 PAT growth compared to previous quarter (73.2 Cr vs 51.7 Cr)
• 📊 DII inflows (+2.02%) provide support

🏭 Industry

• 📊 Industry PE at 51.8, slightly lower than RAINBOW’s valuation
• 📈 Healthcare and hospital sector benefiting from rising demand and structural growth

📌 Conclusion

RAINBOW is a moderately attractive swing trade candidate with strong fundamentals but expensive valuation and weak technical signals. Entry near 1,280–1,300 ₹ offers a favorable risk-reward setup, while exits should be targeted near 1,360–1,380 ₹. Traders should remain cautious due to FII outflows and negative profit variation, using strict stop-loss management.

I can also prepare a side-by-side swing trade comparison of RAINBOW with another hospital sector peer to highlight relative opportunities.