Sesa Goa Ltd. is one of the largest mining company in India, having most of its mining activity in Goa. This company was listed in NSE and BSE on 13 May 1998. The stock was trading at Re.1 level in 2003 and made a high of 495 in 2010, so we see that stock has tremendous potential in longer term, but for short term we are seeing the stock in a downtrend and has been correcting sharply as seen in the chart below, this down move was supported by the lower boundary of declining channel. Also Sesa Goa is a very high beta stock and moves sharply in day trading. Recently the price action has broken below the lower boundary of descending channel, so the stock has become very bearish for near term and the target for short term is 150 level as we see a support do exist at 150 level, since it is 78.6% Fibonacci level of 2010 high and 2009 low. Investors can accumulate the SESA GOA stock at 150 levels for targets as 300 and then 490 in longer term. Traders must trade short on SESAGOA futures contracts, as the price action is suggesting the decline to continue. So the targets for short positions must be at 151 and then 106 as these are important technical levels of SESAGOA stock, stop loss for these positions must be placed just above the 205 level only on closing basis, as this is positional call and should be held for about 2 to 3 months. Technical indicators are showing bearish trend to continue, till 150 levels as there is no more support for the stock. Charts also suggest us that the top of 495 that has been created is 261.8% Fibonacci level of 2008 high and 2009 low, so this is very clear that Sesa Goa stock do follow technical analysis strictly. Hence we are sure about the trends and the targets in Sesa Goa stock.
Fundamentals of SesaGoa:Fundamentally we see the valuations of the company very attractive, but we will still wait for a confirmation on the charts for long entries. The stock currently trades at a PE of 5 and EPS is about 35 per share. Book value is also attractive as it is 133. Good this is the company pays dividends on regular basis. So this is fundamentally very strong company to invest in. This month there was a news regarding the mines in Karnataka region to be shut by the Government on the orders of supreme court.
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