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Investors with a short-term perspective can sell the stock of BHEL at current levels. The stock’s intermediate-term uptrend that started from the August 2013 low of ₹100 came to a halt encountering a key resistance in the band between ₹290 and ₹300 in early February this year. Subsequently, the stock changed direction and has been on a medium-term downtrend since then.
In mid-March, the stock fell sharply breaching a key support and its 200-day moving average at around ₹250. The stock trades well below its 50- and 200-day moving averages. On Tuesday, the stock tumbled 5 per cent with above average volumes conclusively breaking another significant support level at ₹227. The daily relative strength index has entered the bearish zone from the neutral region. The stock can extend the ongoing medium-term downtrend and reach the price target of ₹213 and then ₹209 in the upcoming sessions. Sell the stock with a stop-loss at ₹227.5.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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