Monday, March 9, 2009

Indian Markets Mar 2009 : Infrastructure Sector - Buying Opportunity

Infrastructure as a Sector should be gearing up to take credit for outperforming the market in near future. It has been beaten down enough for obvious reasons of credit crunch. So one was expecting some relief rally in this sector since Govt is expected to focus on infrastructure and power in India. These two sectors require urgent attention in India and Govt had conveyed enough towards the same. Good intentions of Govt aside there seems to be no infusion of smart money into these sectors so far. In other words, signs of Accumulation are missing in the charts.

Talking of pure infrastructure companies, one is left baffled to find that their charts are in shambles. Maybe its a reflection of the global contraction in 2009 that World Bank has predicted on 08 Mar 2009 in preparation of G-20 Finance Ministers' Meet on 14 Mar 2009. Developing countries are expected to be worst hit with a financing shortfall of $270 bn to $700 bn this year as per World Bank estimates. No wonder the charts are so bearish even after interest rate cuts and other sops Indian Govt has offered. So now is the time to pick buying opportunities in infrastructure companies albeit with due caution. We shall analyse buy levels of two important infrastructure companies.

IVRCL Infra
Ivrcl Infra is safe till it does not close below 96 . However close below 96 will be catastrophic for IVRCL. Hence there is no buying sense at the present level of 110. The first buying opportunity for retail investors is at 53. However a close above 130 from present level will offer good buying opportunity, which seems quite unlikely at the moment.

GMR Infra
Retail investors should not touch GMR infra at current level of 68 even with a 10 ft barge pole. The first real buying opportunity will present itself at 28. There may be some buying interest generated at its historic low of 40, but then its better to exercise restraint. However if you have a big appetite for taking risk then you may try your luck at 50.