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We recommend a buy in Bharat Electronics stock from a short-term trading perspective. It is apparent from the charts of Bharat Electronics that after finding support at around Rs 550 in later November 2008, it significantly bounced up. Since then, the stock has been on a medium-term up-trend. While trending up, the stock penetrated its 21 and 50-day moving averages during early December 2008. We notice that the stock is now trading well above these moving averages.

On December 31, the stock breached the long-term down trendline (which was in place since January 2008), by gaining 5 per cent. The daily relative strength index is featuring in the bullish zone. The daily moving average convergence and divergence is also hovering in the positive territory.

We are bullish on the stock from a short-term perspective. We anticipate the stock’s rally to prolong until it hits our price target of Rs 855 in the forthcoming trading sessions. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 735.

Yoganand D.

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