Investors with a medium-term perspective can buy the stock of Bharat Electronics Ltd (BEL) at current levels.
With an almost 5 per cent surge on Friday, the stock gained 11.9 per cent last week, conclusively breaking above a long-term resistance level of ₹100.
Following the breakthrough, the stock appears to have resumed the intermediate-term uptrend that has been in place since it took support at around ₹60 in early May. Moreover, the risk-reward profile is conducive for investors with a medium-term view.
The stock ended a two-and-a-half-month, short-term, corrective decline in late October at ₹86, where the 200-day moving average provided a base, and subsequently, the stock continued to trend upwards. While trending up, it surpassed the 21- and 50-day moving averages in early November, and now trades well above them.
There has been an increase in daily volume over the past three trading sessions. The daily relative strength index (RSI) features in the bullish zone and the weekly RSI is on the brink of entering the bullish zone from the neutral region. Besides, the daily price rate of change indicator hovers in the positive terrain and the weekly counterpart has entered the positive terrain, implying buying interest.
Overall, the medium-term outlook is bullish for the stock. The medium-term targets are ₹120 and ₹130 with a minor pause at around ₹120. Investors with a medium-term view can buy the stock on minor dips with a stop-loss at ₹95.