Technical Check: Nearly 150% rally in a year! A breakout from resistance zone could push BSE to fresh 52-week highs

BSE Ltd has already rallied by about 148 per cent so far in 2021 compared to about 24 per cent upside seen in the Nifty50. The stock has been on buyers' radar as the exchange saw its market share increase in both the cash equity and derivatives segments in 2QFY22.

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BSE’s market share has increased to 8 per cent from 7.2 per cent seen in 1QFY21, and 5.9 per cent in 2QFY20 on the back of increasing interoperability. Its market share in equity derivatives rose to 4.1 per cent from 3.8 per cent in 2QFY20, said a brokerage report.

BSE with a market capitalistaion of over Rs 6900 cr hit a fresh record high of Rs 1640 on 22 November but failed to hold on to the gains and ended lower amid weak market sentiment.

A breakout seen on the weekly charts of the BSE makes it an attractive buy for positional traders. Traders can look at buying the dip for the target of Rs 1710-1755 which translates into an upside of over 14 per cent from Rs 1533 recorded on 22 November, suggest experts.

BSE reported strong operational revenue growth of 42 per cent on a YoY basis for the quarter ended 2QFY22. The revenue beat was led by a 15 per cent YoY increase in equity transaction charges on account of strong volumes and market share gains, Motilal Oswal said in a report.

The domestic brokerage firm maintains a buy rating on BSE for a target price of Rs 1800 that translates into an upside of over 17 per cent from Rs 1533 recorded on 22 November.

“We continue to view BSE as a tactical play on its core business and potential value from a scale-up in revenue in new segments (Star MF, Commodities, and INX). The increased margin would further add to profit on account of high operating leverage,” it said.

Technically, on the weekly chart, the stock has decisively broken out its four monthly “Multiple Resistance” zone on a weekly closing basis.

“This breakout on weekly charts is accompanied with huge volumes indicating increased participation at breakout zone,” Rajesh Palviya, VP– Research (Head Technical & Derivatives), Axis Securities, said.

“On the daily chart, the stock has well placed above its 20,50 and 100-Day SMA and sustaining above the same which reconfirm bullish sentiments,” he said.

Palviya further added that the daily and weekly strength indicator RSI is placed above 50 mark which supports rising strength. “The above analysis indicates an upside of 1710-1755 levels, and the holding period is between 3 to 4 weeks,” he added.

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