Buy Essar Oil for target of Rs 150: IIFL

MUMBAI: IIFL has advised traders to buy Essar Oil for target of Rs 150.

“Essar Oil has broken out from an Inverted Head & Shoulders pattern on the daily chart on Thursday. The Head and Shoulder Bottom has taken place after an intermediate downtrend (from a peak of Rs 104 in April 2010 to a low of Rs 115 in May 2010).

A successful move above the neckline (Rs 141) will mark a change in trend. The neckline also coincides with its 200-DMA, which substantiate uptrend in the near term. The above mentioned pattern contains three successive troughs with the middle trough (head) being the deepest and the two outside troughs (shoulders) being shallower.

At lower levels of Rs 114-115, volumes dried down (head) and a significant expansion in volumes is seen near the neckline of the pattern. We recommend traders to buy the stock in the range above Rs 141 with stoploss of Rs 136.50 for an immediate target of Rs 150,” the report said.

Note: Trading ideas valid for time-period of 1-3 days.