PBA Infrastructure

Investors with medium-term perspective can consider buying the stock of PBA Infrastructure (Rs 90.6).

The company is a construction contractor, executing projects across varied segments such as national and State highways and bridges, dams and mining structures. Since its all-time low of Rs 20.7 recorded in March 2009, the stock has been trending upwards, forming higher peaks and troughs.



Following a medium-term sideways consolidation since May, in the broad range between Rs 70 and Rs 83, the stock made a positive breakout last week by gaining 21 per cent over the week. Strong volume accompanied this breakout.

Moreover, the stock conclusively penetrated its moving average compression (21, 50 and 200-day moving averages) around Rs 75 in early part of previous week.

The 14-day relative strength index is featuring in the bullish zone and weekly RSI has just entered in to this zone.

Daily moving average convergence divergence oscillator has entered in to the positive territory and weekly oscillator is hovering in this territory implying upward momentum.

Our medium-term forecast on PBA Infrastructure is bullish. We believe that the stock has the potential to continue its current rally further to Rs 107, with a pause around Rs 100. Medium-term investors can consider buying the stock with stop-loss at Rs 82.5.

Follow up: Gujarat Industries Power

Company (Rs 1,16.5)

Though the stock slipped 1.8 per cent last week from our recommended price level, the medium-term outlook is positive. We re-affirm our ‘buy' recommendation on the stock with medium-term price target of Rs 137 and stop-loss at Rs 109.