Budget 2019: Infra stocks to remain in focus - Here's what you should know

Strengthening of infrastructure sector has been among major agendas of the NDA government. With focus shifted now on Budget 2019 which is to be presented by FM Nirmala Sitharaman around 11AM on Friday, many infrastructure stocks will perform according to policy announcements. On Thursday, the Nifty Infra index ended at 3,437.55 higher by 11.70 points or 0.34%. Gainers list had stocks like Adani Ports, GMR Infra, Power Grid, NBCC, Siemens, BHEL, Indigo, Vodafone Idea and Bharti Airtel among others.

For this sector, ICICI Bank analyst in their note said, " We expect the Government to continue its infrastructure creation effort by way of roads, railways, ports, inland waterways etc."

Here's how infra stocks will perform! 

According to Angel Broking's research note, the Infra Index had a sharp rally during the calendar year 2017 from the levels of 2700 to 3748; however, 2018 was disappointing as Index almost erased all its previous year’s gain to retest levels of 2800. Eventually, the Index bottomed out during October 2018 by forming a ‘Dragon Fly Doji’ pattern on the monthly chart. The said lows were revisited during the early part of 2019; but it once again acted as strong demand zone resulting in a bullish reversal pattern known as ‘Hammer’ on the monthly chart.

Now after forming a strong base around 2800 levels, the Index has sharply rebounded in the last two quarters and has now sustained above the previous swing high of 3200 to confirm a bullish breakout known as 'Double Bottom' pattern. 

"The said breakout is supported with broad-based buying seen in the major heavyweights like LT, NTPC, Power Grid, Adani Ports along with the other midcap counters," said the note. 

Going forward with Budget 2019,  the note says, "Technically, looking at the weekly chart, the Index has now started moving in a 'Higher Top Higher Bottom' price formation and going ahead we sense the northward journey is likely to continue towards the 3500 - 3640 levels. The oscillators, as well as averages, are positively placed across all major time frames and with all above observations, we have a positive bias on this sector. In such a scenario, some of the preferred names which have shown good traction in recent times and are likely to continue outperformance in the near term are CONCOR, CESC, Torrent Power and LT."