-------- Forwarded Message --------
Subject: Cairn India: 120-115 May Be A Very Good Buying Zone
Date: Fri, 11 Dec 2015 09:35:47 +0530
From: Asis Ghosh <asis...@gmail.com>
Reply-To: asis...@gmail.com
*CMP: 126*
*
* *Buy on dips near 120-115*
*
* *TGT: 133-142-155*-175 (1-12M)*
*
* *TGT: 191-263 (24-36M) (without VEDL proposed merger scenario)*
*
* *TSL< 110/105*
Note:Time & price action on the technical chart suggests that
consecutive closing below 110-105 zone for any reason, Cairn may further
fall to 100-94*-87 & 79-68 area in the worst bear case scenario and in
that case, one can accumulate around 94-87 (being another strong support
zone) for better investment buying average.
Cairn is under pressure for crash in crude oil prices apart form VEDL
merger fiasco. Also a minority retail shareholder recently filed a
petition in Mumbai HC against Cairn & VEDL alleging that the 2014 loan
of $1.25 bln by Cairn Plc to VEDL is illegal. The case is scheduled to
be heard in Jan'16.
Cairn Plc also wrote a letter to our FM recently to seek $700 mln damage
for the IT department action & attachment, which caused loss of value of
its shareholding in Cairn India.
In any way, now Crude is trading near its seven yrs low around $36.50
due to various factors. Technically, Crude is oversold & its a crowded
trade. Crude has good support of $35-32 and if this level does not break
convincingly, then expect a dead cat bounce up to $45 in the near term.
As performance of Cairn is directly proportional to Crude oil prices, in
that scenario, expect some rally in Cairn scrip up to 155 in the near
term. In future, if the proposed VEDL merger ratio is sweetened in
favour of minority shareholder (Cairn Plc & LIC), then expect further
rally in Cairn.
Also the Indian IT dept has attached the 9.78% Equity share holding of
Cairn Plc in Cairn India for the ongoing tax disputes with it and
without the approval of IT dept, this shareholding can't be transferred
to VEDL.
There will be also other various hurdles for VEDL for this merger and if
for any reason, merger can't happen in the near term or the deal is
sweetened significantly, then Cairn may rally significantly towards 200
level. As par some analysis, on standalone basis & Cairn's cash balance
in its BS, Cairn can be valued around 197 !!
*Analytical Charts: *
<http://3.bp.blogspot.com/-ED1fk3hyIZY/VmpE6OzezsI/AAAAAAAAFQA/YZjBdT-M4Uc/s1600/Cairn-10-12-2015.png>
<http://1.bp.blogspot.com/-JNMIH4PQhEY/VmpE8E_V-yI/AAAAAAAAFQI/8kPGhWSJAnw/s1600/Cairn-Fibb-10-12-2015.png>
<http://2.bp.blogspot.com/-AOQuBl7cf70/VmpE-k379yI/AAAAAAAAFQQ/AW1P0eXJgZA/s1600/Cairn-WK-10-12-2015.png>
<http://2.bp.blogspot.com/-XhyoXl-78_4/VmpFAqTncoI/AAAAAAAAFQY/evqegegaYpo/s1600/Cairn-Pattern-10-12-2015.png>
<http://3.bp.blogspot.com/-WXqIUaWqybw/VmpFCmMAOyI/AAAAAAAAFQg/LYmTfAY7WV4/s1600/Cairn-TL-10-12-2015.png>
<http://4.bp.blogspot.com/-NOOXRkTRrGY/VmpFE-324jI/AAAAAAAAFQo/42c3EtOO-e4/s1600/Cairn-TL-LT-10-12-2015.png>
--
Thanks & Regards,
Asis Ghosh
(asisghosh.blogspot.com)
--
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