Why is KNR Constructions Ready to Fly? What Next?

  • Stock Market Analysis

In our last write-up, we discussed Zomato (NS: ZOMT ) & which belongs to the food delivery services. This time we caught a company from the construction sector. It has given a breakout on the weekly chart after a big consolidation. India is a developing country and based on that KNR has good business scope.

Market Sentiment Analysis:
After the Falling Wedge breakout, the market showed one-sided up movement and made a new lifetime high i.e. 20,222.45. Now Nifty is trading in a zone from the last 4 trading sessions. As per the RSI indicator, the market was overbought on a daily time frame so we have seen rapid profit booking in the market. As I always say, a rapid rally is always harmful. The 19,500 is strong support and the 20,000 is psychological resistance for this week.
We are bullish on the market and our view is to buy near this support level with candle confirmation. Let’s discuss the company fundamentals and chart.

Company Business Module:
KNR Construction Limited is one of the leading construction companies. The main focus of it is on the construction of roads, bridges, and irrigation projects. Also, it covers urban water infrastructure and agriculture projects. It has some government clients such as National Highways Authority of India (NHAI), the Ministry of Road Transport & Highways, Telangana, Karnataka, and Madhya Pradesh.

Technical Analysis:
In August 2021, the share price reached a lifetime high of around 345 and then it started to show profit booking. Then the share price came to 200, and after a big consolidation recently, the share has given a breakout from a downtrend. Also, on the weekly chart, it looks like an Inverted Head & Shoulders pattern. As per volumes, it is showing big players' accumulation at the bottom. Now the chart shows the trend changed on the weekly chart, and getting ready for 350 levels.

What next?
The share price is trading around 276 and we are expecting 320/350 levels in the coming few months. Immediate support is around 240.

Fundamental Analysis:

  • The services are demanding and demand is increasing.
  • The company has low debt and is reducing.
  • FIIs & DIIs are increasing their stake.
  • ROE & ROCE are positive. Sales growth of the company is on the top.

Why the Share Price Would Go Up?
The demand for construction is increasing and sales growth is also increasing. The company is profit-making and the share price has given a breakout on the weekly chart.

Disclaimer: The contents produced here are purely for educational purposes. They should not be construed as buy/sell recommendations. Readers are advised to consult their Investment advisor before making any decisions based on the above write-up

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  • Shabnam Parveen @Shabnam Parveen
    I bought knr it was indeed good
    Like 1
  • Hanamanth Kabadi @Hanamanth Kabadi
    Mankind Pharma done with Bottom creation ? will it make new high? 🤔
    Like 0
    • Sagar Rajput @Sagar Rajput
      @Hanamanth Kabadi currently trading in a zone, need breakout for new high. Its making falling wedge on daily chart
      Like 0
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  • sandeep ahuja @sandeep ahuja
    Thanks. Plz make equity symbol hyperlinked for easy navigation next time onwards.
    Like 1

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