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Investors with a contrarian view and willing to take risk can buy the stock of BGR Energy Systems at current levels. In early January, the stock encountered a key resistance at around ₹155 and resumed its downtrend. Since then, the stock has been in a medium-term downtrend. However, significant long-term support at ₹100 provided base for the stock in late March. The stock subsequently changed direction triggered by positive divergence in the daily relative strength index and price rate of change indicator.
The stock has been in a nascent uptrend since then and has breached its 21-day moving average. On Thursday, the stock breached its immediate resistance at ₹108 by gaining 4.7 per cent with above average volume. The daily RSI continues to feature in the neutral region while the weekly RSI is on the brink of entering this neutral region from the bearish zone. The daily price rate of change indicator features in the positive territory indicating buying interest.
The near-term outlook is bullish for the stock. Targets are ₹114.5 and ₹117. Traders can buy the stock with a stop-loss at ₹107.7.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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