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08.12.2019


AAKASHAYA PATRA EXCLUSIVE STOCK FOR INVESTMENT: 
CASTROL INDIA
 ENTER LEVEL – 150 TO 140 STOPLOSS 135 TARGET 175 IN 12 MONTHS

There are early signs of Castrol India coming out of its four-year down trend. After breaking down from the `177 base of parallel lows and descending highs, it formed two lower highs and lower lows on the weekly chart. The 50-DMA is about to cross the 200-DMA. On the daily chart, it has broken out of a bullish flag pattern with a massive volume on Tuesday. It is making higher highs consistently after a flat base pattern in August'19.

It is now on the verge of a breakout with another big 150 days cup and handle pattern, with a depth of 34.8 per cent. The cup pivot or handle beginning high is at `159.4. The MACD is above the zero line and the histogram is in a bullish territory for the past 10 weeks. The RSI is in an extreme bullish zone. Stochastic has given a buy signal from an extreme oversold condition. The stock is also meeting all the CANSLIM criteria. Its price relative strength is at 85 and EPS strength is at 82. The stock's witnessing greater buying demand with a 3.73 per cent increase in its institutional holding. The return on equity (ROE) is at the highest level, ie at 61 per cent. The 25 per cent earnings growth in Q2FY20 shows the fundamental strength of the stock. We suggest buying this stock at 150 to 140 range with a stop loss of 135. The target is open to 170 to 175 in the medium term.

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