Medium Term Investment: GMR Infra

GMR Infrastructure is the holding company of the GMR Group. It is mainly engaged in the development of power and infrastructure projects. The company has been consistently making news rounds last many months, for a lot of positive reasons. This highlights a rather strong fundamental background. We now move on to give you a technical view on the same.

Attached below is the weekly chart. We note that prices since their listing in 2006, exactly 3 years back, started off on an extremely positive note, rising steadily on aggressive buying activity. Prices recovering from any given dip skyrocketed to new highs all the time. Having hit an all time high of 269 during Dec 07, prices sealed the top and slipped into a corrective mode. This fall was razor sharp and in quick straight moves wiped off nearly 70% of the prior strong rally. They did try recovering from the sharp lows and move up afresh but the prior trend having got damaged to quite an extent and the reign being handed over to the bears by then, prices refused to show much of an upside improvement and collapsed lower from any given rally. This dragged the prices lower, moving to new lows each time. This was a complete turnaround action from the prior advance. Finally halting at a low of 46 during October 08 prices bottomed out and started showing some recovery. With some faith being reposed in the counter and in the uptrend prices started improving and showing better trends. The series of lower tops and bottoms was put to an end as prices started showing classic signs of an uptrend—higher tops and bottoms. In doing so prices first staged a successful breakout from the 28-period EMA (black line), giving a further boost to the trend. Prices moved up further to complete the first set of fractal accumulation pattern at 112 levels (not shown). Breaking out from it and in one singly weekly move (post May 09 results) prices managed to complete the second fractal pattern at 169-70 levels (orange line) and also retraced 62% of the entire decline. This also saw prices meeting target of

the first pattern. However the advance having hit into strong resistance, with also a descending Gann line making its presence felt, prices topped out and slipped into a corrective mode. This we see has held on to some good supports and recent sessions have seen prices making improved moves.

With the overall trend continuing to look good and picking up pace, we suggest buying this one at current levels or dip to 130 for target of 195 / 260 / 320. Stop below 120.