Bharat Heavy Electricals Ltd gained 3 per cent accompanied by above average volumes on Thursday. This up move has reinforced the stock’s short-term bullish uptrend and provides an opportunity to buy the stock from a short-term perspective. The stock found support around Rs 100 in August, following sharp declines in July and early August. Since then BHEL has been on a medium-term uptrend. However, it encountered resistance at Rs 148. This level is the ceiling of the gap that occurred while the stock was trending upward.
On Monday, the stock decisively breached its 21- and 50-day moving averages and extended its up move. Further, the stock'’ recent rally has emphatically breached the key resistance level. There is an increase in daily volumes for the past four sessions backing the up-move. Indicators on the daily chart have entered the bullish zone implying upward momentum. Those on the weekly chart are hovering in the neutral region. The stock has the potential to extend its current rally and hit the price target of Rs 157 or Rs 160 in the coming trading sessions. Traders with a short-term perspective can buy with a stop-loss at Rs 147.5 level.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)