Coal India Breakout

Mar 5, 2021

COALINDIA

Fundamentals:-
Average ROE for last 3,5,10 years > 25% (should be greater than 15)

Debt to equity at 0.13 (should be less than 1), Interest coverage at 30.3 (should be greater than 3), Current ratio at 1.77 (should be greater than 1.5)

Dividend yield of 7.95% and pays dividend regularly, means it's an investor friendly company.

Generated free cash flow of more than 60% after capital expenditure from operating cash flow in last 10 years, means it has enough cash for further expansion and wouldn't need to raise debt.

All in all, a fundamentally strong company.

Broken out of a strong resistance with high volumes and now it's retesting the breakout levels again. 50 day EMA just crossed 200 day EMA. Took 182 days to come down from a high of Rs.152 to Rs.109 but took only 133 days to recoup the losses, so it was a fast recovery which makes it a high probability buy. Buy if it crosses 156-157 again with a stop loss below 149.