TECHNICAL REPORT on Bharat Heavy Electricals (BHEL)

CURRENT PRICE- 2430

BSEId: 500103
NSE Id:BHEL

ISIN Id: INE257A01018

INDUSTRY- Engineering – Heavy

Market Cap – 118,321.88

Book Value – 264.32

EPS (TTM) – 65.87

Price/Book – 9.14

Face Value – 10.00

P/E – 36.70

Div(%) – 170.00

Industry P/E- 30.80

PRICE INFORMATION

All Time High    2930.00

All Time Low       75.05

52 Week High    2430.00

52 Week Low      981.00

RECOMMENDATION – BUY

EXPECTED RETURN – AROUND 10 %

TARGET – RS.2600 – 2650

TIME FRAME – 2 to 3 WEEKS

Daily chart:

Recommendations-

The stock has given a breakout today, after a long consolidation of 5 months in the range of 1900-2400. The stock was forming an ascending triangle pattern from previous few months, however the pattern failed as the price failed to give a breakout on either side. An important point to be noted here is that the upper boundary of an ascending triangle is often considered to be a very important supply area from the big players (they set some price which they consider to be so high to be breached). From the previous few sessions the stock was hovering around that supply area (shown in the chart as the upper flat trend line) and managed to close above the resistance line consecutively for more then 2 days with noticeable increase in volumes, even when the broader market was in minor correction mode. The RSI is also throwing bullish divergence and so is MACD histogram.  We expect the stock to start a fresh rally from here and outperform the broader market. We recommend a Buy on the Stock for a target of 2600-2650 within 2 to 3 weeks with a closing Stop loss below 2320.