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The short-term outlook for Coal India is bullish. The stock climbed 1.2 per cent on Wednesday to close decisively above its 200-DMA resistance. This level has been capping the upside in the stock for almost two weeks. The price action since June 3 on the daily chart reflects a wedge pattern. Wednesday’s rally has seen a bullish breakout of this pattern above the resistance at ₹313. This adds strength to the bullish momentum. Also, it makes the region between ₹313 and ₹312 a strong immediate support for the stock.
A rise to ₹326 is possible in the near term. A strong break above ₹326 can take the stock higher to ₹330 and ₹335 in the short term. Traders with a short-term perspective can go long. Stop-loss can be placed at ₹311 for a target of ₹326. Revise the stop-loss higher to ₹319 if the stock moves higher to ₹321. The near-term outlook will turn negative only if the stock declines below ₹310 which looks less probable.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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