Technical Analysis

Tech Query: Can BEML revisit its March 2020 lows?

Gurumurthy K |BL Research Bureau | Updated on: Jun 25, 2022

We zoom in on its prospects, as also that of two other stocks: UPL and BEL

I am holding stocks of BEML at ₹1,370. What is the long-term outlook? Can the stock revisit the March 2020 lows?


BEML (₹1,262.05): The outlook is bearish. The stock had made a clear top at ₹2,084 in December last year. Price action from January to April this year on the monthly chart clearly indicates that there is a lack of strong follow-through buying above ₹1,900. In other words, the stock has got sold every time it crossed ₹1,900 since January this year. Looking at the long-term picture, the stock has been broadly trading in a wide range. Considering that, the chances are very high for BEML to test ₹500-450 from here if not the March 2020 low of ₹369 by the final quarter of the calendar year. In a worst-case scenario, there could be chances of seeing ₹220 on the downside. Supports are at ₹1,050 and ₹910. Short-lived corrective bounces cannot be ruled out. You can consider exiting the stock at current levels with a minimum loss. Wait for the fall and start buying again.

Buy 45 per cent of the intended amount at ₹520. Buy another 40 per cent at ₹480. The balance 15 per cent can be bought at ₹280 in case the stock tumbles below the March 2020 low. Keep a stop-loss at ₹160. A reversal either from ₹500-450 itself or from around ₹220 will take the stock to ₹2,000 again in the next two years.

What is the long-term technical outlook for UPL? I have bought the shares at an average price of ₹743.

Prabhakaran S

UPL (₹640.65): The stock is showing signs of a top. It has been struggling to breach ₹850 decisively since June last year. So, you may have to be cautious in continuing to hold the stock. Supports are at ₹595, ₹575 and ₹560 which can be tested in the next two-three weeks. You can consider two options. One, you can exit the stock at current levels with a minimum loss. Second, if you can withstand this fall and the loss, hold the stock with a stop-loss at ₹530. If the stock breaks below ₹560, it can see a steeper fall to ₹480 and may be even lower. If the stock manages to bounce from any of the above-mentioned three supports, a rise back to ₹800-850 is possible.

In that case, exit the stock at ₹830. But the moving average indicators signalling bearishness. So, a bounce-back to ₹800-850 might not be very easy. Considering all these factors, the most-preferred action that you can take now is to exit the stock at current levels.

I am holding stocks of Bharat Electronics Ltd (BEL) at an average price of ₹175? Should I continue to hold the stock or book profit?


BEL (₹233.6):  The stock might be forming a top. A crucial long-term resistance is at ₹255. A high of ₹259.50 has been made in April and the stock has been struggling to breach ₹250 decisively since then. A sustained rise past ₹255 is necessarily needed to keep intact the overall uptrend. In that case, the stock can test ₹280-300. You need to be cautious in continuing to hold this stock. It is now important for you to protect the profits made. Crucial support is in the ₹215-205 region.

A break of ₹205 and a subsequent fall below ₹200 can drag the stock down to ₹185 initially and then to ₹165. It will also indicate a trend reversal. Exit 50 per cent of your holdings at current levels. Keep a stop-loss at ₹198 for the rest of the positions and hold it. In case the stock manages to bounce from the ₹215-200 support zone and breaks above ₹255, then exit the balance 50 per cent at ₹290.

Published on June 25, 2022
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