Jaiprakash Associates [stockquote]JPASSOCIAT[/stockquote] has been the darling of stock market speculators for a while. The company can be best described as an infrastructure conglomerate that is into everything from mining to power production. The last couple of years hasn’t been kind to infrastructure companies in general and JP is no exception. Since Jan this year, the stock is down -29.44% compared to Nifty’s -4.53%
As you can see from the chart, the stock has long-term support at Rs. 60 levels (off which it bounced off recently) and resistance at Rs. 80 levels. Just yesterday, the stock saw a bullish 4×9 Cross-Over. RSI levels at mid-40s and an imminent MACD signal-line cross-over are supportive to a bullish outlook as well.
There isn’t much to write home about from a fundamental point of view. Most recent 4Q EPS is around 3.11 and it barely made it past the finish line in the Oct-Dec 2012 quarter. Dividends are meager and the stock is currently trading at a PE of around 22. It has a beta of 2.12 which is one of the highest that we track. Clearly, JPASSOCIAT is not for the faint of heart.
All said, JPASSOCIAT is good for a short-term trade. Buy it at Rs. 60 levels and sell it once it hits Rs. 80. For the long-term, wait for clarity in policy direction before making a bet on infra stocks.