BHEL, a government-backed manufacturer of industrial valves, has risen over 7% on Dalal Street in a two-day rally. On Monday, BHEL increased its gain and crossed the 72 level. After that, according to Vaishali Parekh, Vice President of Technical Research at Prabhudas Lilladher, this CPSU stock has delivered a fair correction and is in a favourable position for a potential gain in the future. Parekh forecasts a BHEL gain of more than 19% in the upcoming days.
The price of BHEL stock on the BSE rose by almost 1% to close at 71.31 per share. During trading hours, the stock reached an intraday high of 72.73, up about 3% from the previous print.
The BHEL shares closed at 70.63 apiece on Thursday of last week. The stock also increased by about 4% on this day.
When the closing price on April 10th is taken into account, the BHEL stock has increased by almost 5% on the BSE. Yet, if we take into account the day’s high of 72.73, the stock has increased by about 7% on the D-Street.
BHEL has provided a good correction from 92 to 66 (the 0.50% retracement level of the recent advance towards the 52-week high), according to Vaishali Parekh, Vice President – Technical Research at Prabhudas Lilladher, in a stock radar report.
She also mentioned that a double bottom pattern and the 200 DMA are also close to 66 levels. Technically, the stock has resistance at 65 levels, which is strongly supported by the 200 DMA, Double Bottom formation, and 50% retracement levels.
“A decisive close above 79 will see new heights in the coming days,” according to Parekh.
So, she continued, “The RSI is in a good position and rising, with the ability to continue the upward momentum. One can buy this stock with a stop loss of 66 and an upside objective of 82 to 85 in the next days.”
Last week, BHEL received a sizable order of 3,700 crore. It was given a letter of intent (LOI) to supply the defence industry with strategic equipment, with delivery scheduled to take place over the next 12 years.
BHEL shares have soared by more than 26% on the BSE in a single year.
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