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The stock of Coal India is showing a sign of reversal. The stock has been in a strong down trend since October last year. The consolidation above ₹140 in the second half of December followed by a strong 6.33 per cent surge on Monday indicates that the trend is reversing.
Additionally, the level of ₹140 is an important trendline support above which the consolidation had happened last month also strengthens the case of a reversal. It also indicates that the uptrend that has been in place since October 2020 is intact. It also leaves the short-term outlook bullish. Immediate support is at ₹150 and the deeper support will be at ₹142. We can expect the stock to sustain well above 150 itself. The stock can rise to ₹162-165 initially.
A break above ₹165 can then take Coal India further up to ₹175-180. Traders with a short-term perspective can go long now. Accumulate longs at ₹151. Keep the stop-loss at ₹141. Trail the stop-loss up to ₹158 as soon as the stock moves up to ₹162. Move the stop-loss further up to ₹166 as soon as the stock touches ₹170. Exit the longs at ₹174.
(Note: The recommendations are based on technical analysis. There is risk of loss in trading.)
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