Buy Coal India, Sell Lupin: GEPL Capital

GEPL Capital has come with its top trading picks for ther week. The research firm has recommended to buy Coal India and sell Lupin for target of Rs 335 and Rs 408 respectively.

COAL INDIA - Pull back rally

Coal India has been in a strong downtrend since last eight months from its all time high of 422.The rally which has started from the low of 289 has topped out around 420-425 after a consistent rise of almost five months. Prices have retraced almost 95-98 % in last eight months and have come down to twelve months low of 289.On weekly chart this stock is into deep oversold territory in terms of momentum indicator reading which indicates that a pullback rally is on cards anytime. It has also formed a double bottom type of bullish pattern in the area of 290-300 indicating a temporary reversal in prices. Talking about weekly charts, on this time frame Coal India has very strong support area in the range of 290-295 (Previous low and basing process is around this price range) which will prove to be an area of short term trend reversal which can push the price on the higher side. Keeping all this things in mind, CIL seems to a contra buy in this bearish scenario for a countertrend rally with a stop loss placing at 293 for a target of 335.

LUPIN LTD - Sell on rise

This stock was able to give some relief rally after witnessing a massive fall from price level of 480-490 to directly up to 408-410 zone. Albeit, the rally from the low of 408 has emerged on a very low volume raising the question about its sustenance on the higher side. Momentum indicators on daily as well as on weekly charts are not showing any major strength in this rally. Price pattern on daily chart is not indicating that ongoing up move is going to face major supply in the area of 445-450(50DEMA-449).The stock is trading well below its long term moving average (200DMSA-446) indicating that the larger degree trend is still very much down. Technical structure of this stock seems to be very weak and one can go short in this counter on rise around 440-445 with a stop loss placing at 460 for a target of 408.

FIIs holding more than 30% in Indian cos

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

To read the full report click on the attachment

Read More