Stock Pick: Cairn IndiaIndustry: Oil Exploration
Current Price: Rs 245.25 as on 14th August, 2008
Target Price: Rs 272
Week High/Low: 342.7/125
Call: BUY/HOLD
Long term price for crude is expected to be around $85 per barrel as per Edelweiss Capital Research. Stocks such as Cairn India, Reliance Industries and ONGC will see a short term surge if crude drop below $100 per barrel. This would be largely due to first a fall in their share prices and then bottom fishing for value buys kicking in.
The stock faces a temporary risk of under-performing the Sensex if:
- Crude prices continue to fall
- Rupee appreciates
However, for those willing to hold the stock till January 2009, CIL will see a potential upside of 11% from current levels. For those who have gathered the stock between Rs225 and Rs232, a HOLD is recommended.
For the current 90 day cycle, the stock has a support at Rs 215 and faces resistance at 245. For traders, the stock is likely to see a downside after rising a little more from current levels. This correlates with an RSI of 54.15 currently.Chart Source: http://www.bseindia.com/
4 comments:
what is bottom fishing?
it is when a stock is said to have fallen too much and is very cheap to buy irrespective of analysis and fundamentals. Thats when you bottom fish to buy cheap stocks.
Rahul, You need to tell people that you have changed the blog name!
About this piece I think the oil will never go less than 100$ in the near future or o be straight we will not allow it to go.. we are going through a tough patch and this will be reduced but continued. Good term: Bottom Fishing
hii tiger...as per a report by Edelweiss and OGJ, oil is expected to hit $85-$90 within the next 12 months. The parity for oil lies at $85 at current levels and the global demand for oil right now is falling. So i can say that i wouldn't be shocked if i see oil hitting $85.
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