India Coal Stock: Chart Check: After taking support near 200-EMA, this Coal Stock could reach new 52-week highs. Time to buy?
Coal India, an Indian government-owned coal mining and refining company, hit a 52-week high of Rs 209 on April 22, 2022, but lost momentum.
It took support near the 200-day EMA, placed around Rs 169-170 in May 2022, before bouncing back. The stock has risen more than 16% since then (Rs 169-197, closing price as of June 8, 2022).
The stock is holding comfortably above the long-term and short-term moving averages placed at 50, 30, 20 and 10-DMA, a positive sign for bulls.
The stock is hitting higher highs and lowers, and it witnessed a breakout of a 4-week consolidation range (Rs 192-165) bodes well for the bulls earlier in June.
Coal India’s share price has seen strong buying demand from the crucial support zone of Rs 165-170 being the confluence of the 200-day EMA (currently placed at Rs 170) and the ask line rising joining the lows of December 2021 (Rs 139) and February 2022 (Rs 149), signaling strength and a positive price structure.
“The stock registered a break above the four-week range (Rs 192-165) in June, signaling the resumption of the upside and providing a new entry opportunity,” said Dharmesh Shah, Chief Technical Officer, ICICI Direct in a note.
“We expect the stock to continue higher and head towards the Rs 213 levels in the coming weeks (30 days) as this is the 123.6% external retracement of the last decline (209-165)” , did he declare.
He further added that the stock is enjoying immediate support at the Rs 185 levels, the 61.8% retracement of the current bullish move (Rs 178-199). “Among the oscillators, the daily MACD is in an uptrend and has recently generated a buy signal thus validating a positive bias for a 1-month duration,” Shah recommends.
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