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We recommend a buy in Gammon India from a short-term trading perspective. It is visible from the charts of Gammon that after shaping a double bottom reversal pattern between late October 2008 and mid-May, the stock conclusively broke out. Moreover the stock achieved the pattern price target of Rs 140 in May and continued to move higher. The stock has been on an intermediate-term up-trend from its March low around Rs 50. Following a minor correction to Rs 142, the stock resumed its up-trend. It is trading way above its 50- and 200-day moving averages. Both the daily and weekly relative strength indices (RSI) are featuring in the bullish zone. The weekly moving average convergence and divergence (MACD) has entered the positive territory. We are bullish on the stock from a short-term perspective. We anticipate it to move higher until it hits our price target of Rs 195 in the approaching trading sessions. Traders with a short-term perspective can buy the stock while maintaining a stop-loss at Rs 168.

Yoganand D.

BL Research Bureau

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