Technical Analysis

Coal India is trapped in a band

Yoganand D | Updated on January 23, 2018 Published on May 17, 2015

The stock has been consolidating sideways in the range of ₹340-₹400 since last year



Here are answers to readers’ queries on the performance of their stock holdings.

Please provide the short, medium and long-term targets for Coal India.

Gopal Setty, Vamsi

Coal India (₹366.1): Following a steady medium-term uptrend from the March 2014 low of ₹240, the stock of Coal India encountered resistance around ₹420 in early June 2014.

Subsequently, the stock reversed lower and moved in a sideways consolidation phase in the broad band between ₹340 and ₹400.

After testing the upper boundary consistently in late January, February and early April, the stock revered downwards again. Currently, the stock is in a short-term downtrend.

A strong fall below the immediate support level of ₹355 can pull the stock down to the lower boundary at ₹340 levels.

A decisive breakthrough of ₹340 levels will have bearish implications and drag the stock down to the significant long-term support level of ₹300.

Investors with a long-term perspective can consider holding the stock with a stop-loss at ₹300. An upward bounce from the lower boundary will keep the stock’s sideways movement alive and take it to a high of ₹380 and then to ₹400.

The stock needs to decisively rally above ₹400 to alter the sideways movement and push it higher to ₹420 and then to ₹450 in the long term.

Recommend the technical outlook on the stock of Aurobindo Pharma purchased at ₹1125.

P Deshpande, BP Kohil

Aurobindo Pharma (₹1351.7): The stock is in an uptrend across all time-frames — short, medium and long term. However, it encountered resistance at around ₹1400 in April this year and started moving sideways.

As you sit on a 20 per cent profit, consider booking profits at the current juncture, and also in the light of the present market volatility. In addition, the indicators and oscillators in the weekly and monthly chart display negative divergence indicating a potential trend reversal.

A downward reversal from the immediate resistance will pull the stock down to ₹1175 levels.

Key supports below this level are placed at ₹1,135, ₹1,100 and ₹1,000.

An emphatic fall below ₹1,000 will alter the medium-term uptrend and pull the stock further down to ₹900 and ₹800 levels. But, a conclusive rally above ₹1,400 can take the stock higher to ₹1500.

Please advice on the short, medium and long term outlook for Hindalco.

Sai Naveen

Hindalco Industries (₹137.1): Since encountering a key resistance at ₹198 in July 2014, the stock changed direction and has been on an intermediate-term downtrend. However, it found support in the ₹125-130 zone and began to move sideways. The presence of an important resistance at ₹140 has kept the stock in check over the past two months.

Currently, the stock is testing the resistance level. An emphatic breakthrough of this resistance will pave the way for an up move to ₹160 in the short to medium term.

To alter the intermediate-term downtrend, the stock needs to comfortably surpass the trend-deciding level of ₹160.

In that scenario, the stock can trend upwards to ₹175 and then to ₹200 levels in the long term.

However, if the stock tumbles below the immediate support zone of ₹125 and ₹130, it will strengthen the downtrend and drag the stock down to ₹110 or ₹100 in the medium term.

Send your queries to techtrail@thehindu.co.in

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