Technical Check: 40% returns in a year! Bharat Electronics is on track to hit fresh 52-week high in 6-9 months

Bharat Electronics Ltd (BEL) rallied by about 40 per cent in the last one year compared to 5 per cent rise seen in the Nifty50, and 6 per cent gain in the S&P BSE 200 index in the same period.

BEL is a Navratna PSU under the Ministry of Defence, Government of India hit a fresh 52-week high of Rs 227 on 12 November but then the trend went sideways.

See Zee Business Live TV Streaming Below:

However, the company has been resilient amid the volatility seen on D-Street due to Russia-Ukraine war. The stock rose 0.17 per cent in a week, and over 4 per cent in one month compared to 6 per cent, and 9 per cent fall seen in the Nifty50 in the same period.

The stock is trading well above the crucial short- and long-term moving averages of 30,50,100 and 200-Days Moving Average which is a positive sign for the bulls.

The company is forming higher high and higher lows on weekly charts which is a positive sign for the bulls. A close above the short moving average of 21-DMA suggests strength.

The stock can be bought now or on dips for a target of Rs 260 in the next 6-9 months, suggests experts.

BEL is an Indian state-owned aerospace and defence company with about nine factories, and several regional offices in India.

The company spends about 7.5 per cent of its turnover on R&D, one of the highest amongst defence PSUs. Till now approx. 160 applications filed for IPRs

The order book of the company stands at 52,148 Cr with a fresh order inflow of 1,561 Cr. Major orders include Advanced Composite Communication System, Electronic Warfare System, Naval Fire Control System, 3D Surveillance Radar.

The stock price is in a long-term uptrend forming higher top and higher bottom on weekly chart i.e., each new high after an up move is higher than previous high and each new low after a decline is higher than previous low.

For the last 5 months stock has been range bound between 228 and 190 odd levels. It has been consolidating its gains and formed a base for next leg of rally.

“After forming bullish hammer candle (small body and long lower shadow) indicating buying at lower end of the channel, stock has followed up with bullish long body candle and above average volumes this week,” Ashish Chaturmohta, Director, Equity Research, Sanctum Wealth, said.

“Price has moved above 21-day exponential moving average (green line) which has been acting as support for the during its long uptrend. Relative strength index (RSI) has given positive crossover with its average turning up from level of 50 on weekly chart,” he added.

Chaturmohta said that the stock can be bought on dips to 209 with stop loss of 200 for target of 260 in next 6-9 months.

(Disclaimer: The views/suggestions/advices expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)