Short-term traders can look to buy the stock on dips for a possible target of Rs 227 in the next 3-4 weeks, suggest experts.
The stock rose from Rs 132 as on 17th October 2023 to Rs 207 as on 17th January 2024 which translates into an upside of over 56% in just 3 months and has doubled wealth in the last 6 months.
It rose more than 4% in a week and over 14% in a month. The momentum helped the stock to hit a fresh 52-week high of 213 on 17 January 2024.
The stock recorded a breakout from a narrow consolidation range since January 2024 on the daily charts where 203-205 acted as a stiff resistance on the higher side while on the downside 20-DMA or levels above 190 acted as a support.
The stock witnessed a breakout earlier this week. It closed at 206 on 17th January 2024 and hit a fresh 52-week high in intraday trade.
After making a bottom in October 2023 the stock registered positive closing in 8 out of the last 11 weeks.In terms of price action, the stock is trading above most of its crucial short- and long-term moving averages such as 5,10,30,50,100, and 200-DMA on the daily charts.
The daily Relative Strength Index (RSI) is placed at 71.8. RSI above 70 is considered overbought. This implies that stock may show pullback, Trendlyne data showed.
“BHEL is in an overall uptrend and forming higher lows on a monthly scale from the past three months. On a weekly scale as well the structure of higher highs – higher lows is intact from past many weeks and supports are gradually shifting higher,” Arpit Beriwal, Analyst, Equity Derivatives & Technicals, MOFSL, said.
“On a daily scale, the stock gave a range breakout above 203 zones after twelve sessions and formed a bullish candle. It is holding its gains despite market weakness and holding well above its 20DEMA with noticeable volumes,” he said.
“Momentum indicator Relative Strength Index (RSI) is positively placed which indicates strength in the stock,” highlighted Beriwal.
“Looking at the overall chart structure we are recommending to buy the stock with keeping stop loss below 199 levels on a closing basis for a target towards 227 zones,” he recommends.
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(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)