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We recommend a buy in GMR Infrastructure from a short-term perspective. It is apparent from the charts the stock has been on a long-term uptrend from its October 2008 low of Rs 22.75. However, after encountering resistance around Rs 90 in June it was on a medium-term decline till the July support level at Rs 60. With in the long-term uptrend, the stock has been consolidating sideways in the range of Rs 60 and Rs 75 since July. The key support at Rs 60 along with the positive divergence in the daily relative strength index (RSI) backed the stock’s 7 per cent jump on November 4. The daily RSI is on the verge of entering the neutral region from the bearish zone and the weekly RSI is hovering over the neutral region. Considering that the stock’s long-term uptrend-line is in tact we are bullish on it from a short-term perspective. We expect the stock to move up until it hits our price target Rs 69.5. Traders with a short-term perspective can buy the stock while maintaining a stop-loss at Rs 60.

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