While hunting for stocks that have a high probability of a reversal from downtrend to uptrend, a popular Inverse Head & Shoulders chart pattern makes it to the list of top choices among market participants.
The same pattern is getting formed on the daily chart of Craftsman Automation Ltd (NS:CRAF). It is an engineering company in the automotive space with a market capitalization of INR 9,091 crore and trades at a TTM P/E ratio of 28.43.
Image Source: InvestingPro+
The stock has been given a financial health score of 4 out of 5 which makes it almost an excellent choice for the portfolio. Such ratings are derived after analyzing over 100 parameters across various verticals such as relative valuation, cash flows, profitability, etc. Any stock with a rating of 3 or above can be considered for investment and blended with other factors to arrive at a much-rounded approach.
Although the fair value of the stock is INR 4,610, leaving a valuation gap of INR 2.6% from the CMP, analysts are quite bullish on the counter. A total of 7 are covering this stock with an average target price of INR 5,309 per share. That’s a decent upside of around 18%.
Image Source: Investing.com
On the technical front, the stock’s Inverse H&S pattern is pointing out to a target of INR 5,250 - 5,300, almost in line with analysts’ estimate.
Investors can combine analysts’ targets, fair value and technical levels to develop a holistic approach toward investing. InvestingPro makes it easier to follow this powerful framework and it is now available at a steep discount of up to 69%, for INR 216/month. Click here to grab your limited-time opportunity today!
X (formerly, Twitter) - Aayush Khanna