GMR Infrastructure

We recommend a sell in the stock of GMR Infrastructure from a short-term perspective. It is evident from the charts that the stock has been on an intermediate-term downtrend since its June 2009 high of Rs 91, forming lower troughs and lower peaks. Moreover, within this downtrend-line we notice formation of bearish symmetric triangle pattern spanning since November 2009. After meeting resistance (downtrend line) at around Rs 70 recently, the stock resumed its downtrend. On January 12, the stock fell 3 per cent with above average volume, breaking through the triangle pattern and also breaches the 21- and 50-day moving average. The daily and weekly relative strength indices are slipping towards the bearish zone in the neutral region. Considering that the downtrend-line is intact and the stock has broken out of the pattern we are bearish from a short-term perspective. We expect it to decline until it hits our price target of Rs 60. Traders with short-term perspective can consider selling the stock while maintaining stop-loss at Rs 70.50.

via BL