Stocks from the transport and logistics sector have attracted buying interest recently. Prominent companies such as GATI, Gateway Distriparks and Transport Corporation of India have appreciated sharply in the recent weeks. While we are positive on GATI and Transport Corporation, we discuss GATI in detail in this post.
From the above weekly chart of GATI, it is evident that the stock has turned around at the key support level at Rs.22-25 range. The breakout, last week, past the prior swing high at Rs.49.70 signals the reversal of the medium-term downtrend. Also of interest is the breakout today above the 50% retracement of the prior fall from the high of Rs.79 to the recent low of Rs.22.80.
This breakout above the 50% mark (which is also the balance line) is a sign that the stock could now rally to the major middle line of the upward sloping pitchfork at Rs.75+.
A fall below the Friday’s low of Rs.43.50 would be a sign of weakness and would make us take a re-look at the upside potential. Investors may have a stop loss below Rs.43.50 for an initial target of Rs.75. Please realise that the analysis and the targets are based off the weekly chart. Hence, it would take a while for the stock to reach this target. Patience and holding stocks for a while is the key to build wealth in stock market.
(The view featured here is based on Technical Analysis of historical stock price action. Please read the Disclaimer)