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The stock of BGR Energy Systems surged 6 per cent, breaking through a key resistance at ₹120, with above-average volume on Wednesday. Since March 2016, the stock has been in a sideways consolidation phase in the wide range between ₹100 and ₹128. In late November, the stock found support at the lower boundary of this sideways range at ₹100 and reversed higher.
The stock’s recent rally has emphatically breached its moving average compression (21-, 50- and 200-DMAs) at around ₹116. The daily relative strength index has entered the bullish zone from the neutral region and the weekly RSI is on the brink of entering the bullish zone. The stock is currently testing the upper boundary of the sideways range at around ₹128. It can break through the immediate resistance at ₹128 and reach the near-term price targets of ₹130.5 and ₹134. Traders with a short-term perspective can consider buying the stock with a stop-loss at ₹122.5 .
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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