Accumulate Coal India; target Rs 395: ICICIdirect.com

ICICIdirect.com is bullish on Coal India and has recommended to accumulate the stock in Rs 352-358 range for a target price of Rs 395, in its April 19, 2012 research report.

"The share price of Coal India Ltd had been consolidating below its 200 day moving average (DMA) in the broad range of Rs 350-315 since the start of 2012. The most important observation on the price chart of Coal India is that the said consolidation appears to have occurred in a well defined Symmetrical Triangle formation on the daily chart. The recent price surge has seen the share price record a strong break-out above its 200 DMA (Rs 343) and in the process also register a break-out above the Triangle formation as highlighted in the adjoining chart. It must be noted that the share price pierced through its 200 DMA and the triangle pattern with a strong gap-up opening on the day of the break-out. This indicates a shift of momentum in favour of bulls. The measuring implication of the price pattern works out to around Rs 395 as measured by calculating the width of the triangle’s base (358-312 = 40) from the break-out level (349+46 = 395). The pattern would become void only if prices close below the rising gap area formed on the day of break-out at Rs 339.90 on a closing basis. Among oscillators, the moving average convergence divergence, which measures the strength in the underlying trend, is in a rising mode after remaining firmly above its trigger line all the while when the price was in consolidation and supports the price break-out. Strategy: Accumulate Coal India in the range of Rs 352-358 for a target of Rs 395 with a stop loss below Rs 339.90," says ICICIdirect.com Research report. Public holding more than 90% 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

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