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Wednesday, August 17, 2011

Debacle of KS Oils- What’s cooking in?

KS Oils' free fall
KS Oil, an edible oil manufacturing company, share has been continuously falling since Nov 2010.Yesterday stock closed at Rs. 8.65, which is around 80% down from the price at the beginning of this year. Financiers of this company are selling the pledged shares due to margin pressure. Edelweiss finance, SICOM & L&T Finance have sold 1.2 crore shares, 63 lakh shares and 57 lakh shares respectively.All this shares add up to 2.4 crore shares which constitute the 5.6 % of the total equity capital of KS Oils.

This stock was recommended by foreign broking firm Nomura when the stock was at Rs. 18 and presently stock has been eroded by more than 50% from that level.
The stock crossed below its 200 days EMA on 16/11/2010 and since then it has been falling incessantly. As per technical analysis, scrip falling below its 200 days EMA is considered bearish.Yesterday, stock fell by 32.38% on strong volume and 45% of total trades resulted in delivery.15 days RSI of KS Oils dropped to staggering 9.9 % level.Since May 2010, stock has been continuously underperforming the Sensex.


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