Hindalco (CMP:134) made a good bounce yesterday from its intermediate support zone of around 123 along with other metal scrips except JSPL (which is facing a possible rejection by the Govt. for its two controversial coal blocks in Gare Palma & Tara due to very low bids amid talk of cartelization).
Looking at the chart, below 123, critical support zone for Hindalco is around 119-114. Sustain below 114, it could fall up to 100-75 zone (low probability as of now).
On the upside, it has to sustain above 138-145 zone for a meaningful rally up to 162 in the short term. At least two consecutive closing above 162, may bring it to near 180-200 zone in the mid term. But for that, Coal block allocation case & clarity need to be resolved in its favour.
The present issue of summoning order by a CBI Trial court against its Chairman & our former PM in the controversial coal block allocation issue may be challenged in SC shortly. There are many examples of such summoning order against such high executives by Trial Courts being quashed by the SC, as it will be very difficult to establish specific vicarious personal liability against such persons in day-to-day affairs or some important policy decision/deviation. First, summoning order against them will be challenged in SC and only after that Trial will start (if SC reject the plea). This will take considerable time.
This time the SC may take a definitive approach for this coal block allocation legacy issue to end permanently, so that investor could regain confidence in Govt. policies in the larger interest of "Shinning India".
Fundamental aspect of Hindalco and other metal scrips is irrelevant here, unless & until this coal block allocation issue is resolved full & finally.
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