The stock of Bharat Heavy Electricals (BHEL) established a rally in November 2020 from about ₹27. The scrip appreciated with intermittent corrections and crossed over the psychological level of ₹50 in early January. However, after marking a high of ₹56.5 the stock witnessed a correction. Between mid-January and mid-April, the stock tumbled by nearly 24 per cent and marked a low of ₹43. But this being a support, the decline was restricted and, in fact, it quickly reversed the trend upwards. The stock rallied and moved past the high of ₹56.5 while marking a fresh 52-week high of ₹59.3 on Thursday. It closed a bit lower at ₹58.

The breakout has strengthened the rally and the stock is likely to head further north. Supporting the bullish bias, the relative strength index is steadily moving up and the moving average convergence divergence indicator on the daily chart entered the positive territory in early April. It is tracing a positive trajectory. Considering these, traders can be bullish and go long with a stop-loss at ₹56 for a target of ₹62.

(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)

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