Mangalore Refinery and Petrochemicals Limited (MRPL):
MRPL was set up in 1988 with a crude processing capacity of 3 million metric tonnes per year by HPCL (Hindustan Petroleum Corporation) and Aditya V Birla group. ONGC (Oil and Natural Gas Corporation) acquired entire shareholding of A V Birla group in 2003, making it a majority held subsidiary. Currently the refinery’s capacity stands at 9.69 million metric tonnes per year. MRPL implemented Quality Management System (QMS) as per ISO 9000:1994 standards from December 1999. In January 2003, MRPL upgraded its QMS to ISO 9001:2000 standards and was accredited on March 13, 2003 by TUV Rheinland. It has declared a net profit of Rs.525 crores for the financial year 2006 – 07.
Both weekly and daily charts of MRPL are displayed below. In weekly chart, an “inverse head and shoulder” pattern has been formed. We have seen in my previous article “Chart patterns and market’s reaction” that this pattern is a bullish sign. Watch the low on the ‘inverse head’ nearly going down to test the previous low. The neckline resistance has been broken comfortably.
In the daily chart, we can see the waves clearly. The first wave retraced from a low of 32.50 to a high of 45.70. Some decline and consolidation has taken place in the last two months; on July 23 it had broken its resistance with very good volumes. The next resistance exists at 48.50, which is also the 50% retracement level considering a previous high of 64.40 and recent low of 32.50.
Close above 48.50 will take the stock to 52.25 and 56.90.
Neyveli Lignite Corporation of India Limited:
Neyveli Lignite Corporation (NLC) is located at Neyveli in the state of Tamil Nadu. It has been involved in exploitation of lignite deposits and thermal power generation for over 40 years. NLC offers consultancy services to other organizations in thermal power generation. It has two lignite mines with a capacity of 10.5 million metric tonnes per annum each and another with a capacity of 3 million metric tonnes per annum. The total installed power generation capacity is 2490 MW. It has also proposed to install power plants in Tuticorin (Tamil Nadu), Gujarat, Rajasthan and Orissa.
The company’s net profit for the financial year 2006 – 07 was Rs.567 crores.
As in the case of MRPL, this stock too, has formed an “inverse head and shoulder” pattern in weekly chart. It has also broken its resistance in weekly chart.The breakout volumes in daily chart have been good in both MRPL and NLC. In fact, it has managed to close above 80.50 which is 61.8% retracement considering a low of 48.75.
The next target for the stock is its previous high i.e. 100.20.
Rashtriya Chemicals and Fertilizers Limited (RCF):
RCF manufactures various grades of urea, bio fertilizer, liquid micronutrients, methanol, sodium nitrate, sodium nitrite, ammonium bicarbonate, methylamines, dimethyl formamide, dimethylacetamide etc. Over the last 3 years, its net profits have been more or less consistent i.e. Rs.141, 149 and 148 crores.
The daily chart of RCF is displayed above. The stock, after making a high of 49.85 on February 9, 2007, was on a downtrend for about a month. Nearly after 4.5 months it has broken the previous high with very good volumes. The previous high should act as a support for the stock. It is also bullish on weekly charts. The next targets for RCF are 56.50 and 62.50.
Tata Sponge Iron Limited:
The company was initially set up in 1986 as a joint venture undertaking by Tata Steel and the Industrial Promotion and Investment Corporation of Orissa (IPICOL). In 1991 Tata Steel acquired the entire stake of IPICOL. Tata Sponge manufactures sponge iron with an installed capacity of 390,000 metric tonnes per year. Company’s net profits for the last two years have been steady at around Rs.22 crores.
In the daily chart of TATASPONGE, the classic “cup and handle” breakout, a bullish continuation pattern can be observed. It has taken about 6 months to form this pattern. The cup’s left peak of 132 was broken on Monday with good volumes. In weekly chart, the stock had formed a “double bottom” between January and April 2007.
The target after the cup and handle breakout works out to 168.
Varun Shipping Company Limited:
Varun Shipping is a private hydrocarbon cargo carrier in India with a fleet of 12 LPG tankers, 3 crude oil vessels, 3 offshore supply vessels and 1 product vessel. These vessels are either placed directly with the end users or in the pools wherein the managers of the pool arrange for chartering of these vessels. The company had declared a net profit of Rs.141 crore for the year 2006 – 07.
The stock is bullish in both daily and weekly charts. It has been consolidating over the last 2 months and on July 23 it had broken out with reasonably good volumes. Minor resistance exists at 71, after which the targets are 75 and 83.