Coal India was in the consolidation mode from June 2014 and formed rectangle pattern but eventually broken the pattern in the downside during late September 2015 mainly due to global selloff and mixed quarterly results.
After the rectangle breakout, 300 levels offered a huge support and managed to hold even during the Jan/February global assault and started to form “Cup” pattern with 300-295 levels as the bottom. It offered 3 opportunities at 300 levels for 10% upside during the last 3 months.
During 2nd week of march the strong support at 300 levels slowly gave up and Coal India closed for the week below 300 for the first time in the last 3 months though it managed to close above the stiff resistance at 292 level but still struggled to overcome 300 levels for the last couple of weeks.
The strong support at 292 levels failed to hold last week and closed below 290 levels and today it reached 52-week low below 280 levels (Current live price: 279 at the time of writing).
With the cup pattern failed to stop & small rectangle formation failed to hold, there’s no strong support sighted for Coal India till 240 levels and that should be the best place to enter into a trade for the first target of Rs.300, second target of Rs.330.
The fundamentals of the company are intact as of now but wait for the annual results to be out for any change in stock quality and potential.
Written by me in Quora on 5th Apr, 2016.