Consolidated Construction Consortium

Investors with medium-term horizon can consider investing in the stock of Consolidated Construction Consortium (CCCL, Rs 87.2).

The company provides a wide range of construction services that include construction design, engineering, procurement and construction and project management. Since the April 2009 low of Rs 21, the stock has been on an intermediate-term uptrend, shaping higher peaks and higher troughs. It is observed that buying interest emerges in the stock at every decline underlining the bullish undercurrent.

Within this uptrend the stock has been consolidating sideways from late December 2009, showing bullish momentum. The stock recently found twin support at Rs 80 (key support and the up trend line that coincides there) and started moving up, crossing 21- and 50-day moving averages.

The daily moving average convergence and divergence (MACD) indicator is on the verge of finding support at zero line and in holding in positive territory, while the weekly MACD is featuring in this zone. The daily relative strength index is heading towards the bullish zone in the neutral region and weekly RSI has re-entered this area.

Considering that the stock's up trend-line is in tact, we are bullish on it from a medium-term perspective. We believe that the stock has the potential to trend up further until it hits our medium-term price target of Rs 106. Investors with medium-term perspective can consider buying the stock while maintaining Rs 78 as stop-loss. Short-term traders can desist trading in this stock as volatility is high in this counter.

Follow up - Karnataka Bank (Rs 113.6)

The stock declined Rs 3.9 or 3.3 per cent over last week, in line with our anticipation. We reiterate our medium-term bearish view on the stock. Traders can consider selling it with the targets and stop-loss indicated last week.

via BL