Bharat
Forge is one of the leading exporter of auto components in India. In yesterday trading
session, the stock has gained by 3 percent at Rs 861.50 on BSE. Hence, we feel
that the recent rally in the stock will continue in coming trading session
supported by good technical breakouts.
On chart, stock prices are volatile.
The stock hit all-time high of Rs. 1363 in April 2015, then price revered to 52
weeks’ low of Rs. 682, in the month of June 2016, down by 50 percent from its all-time
high. Currently, stock price is trading at Rs. 861.50, this stock price witnessed
26 percent rise in the last two months, from the 52-week low. We feel that
there is still some steam left and the rally is likely to continue.
On a different time,
scale at daily & weekly chart, stock price is making higher tops and higher
lows pattern and trading above 20DMA (794.80), 50DMA (765.59) and 100DMA (773.28)
respectively, suggesting it has potential up move in upcoming trading sessions,
indicate positive outlook for the stock price.
Technically
on daily chart, stock price at. Rs. 861.50 has given a breakout of rounding
pattern at Rs. 840 level, and it’s moving towards northward direction, indicate
ongoing bullish rally in the stock price, which will take stock price towards Rs.
960, which is 11 percent on upside. Applying
other indicator on the chart like Bollinger Band (BB) we find stock price at
Rs. 861.50 is ridding the ‘Upper Bollinger Band’ and
also the bands are widening, thus indicating positive
momentum.
Also
on weekly chart, stock price was trading below 20 SMA from 11 months, last week
we spotted a crossover over price, show price is well trading above the support
level, which also add more bullishness for the stock price.
Momentum
Oscillator, MACD (Moving Average Convergence & Divergence) on higher chart has
given a positive crossover art, favouring the bullish view, which could witness
the Bharat Forge marching higher.
RSI
(Relative Strength Index) 14-week on a weekly and monthly chart are in rising
mode and not yet overbought, which has more room left on upside. The 14-week
RSI also trade above its 9-week EMA, which is positive signal, indicate better
perform in the weeks to come.
If
one were to go by the volume data, then more up move seen on the stock price.
Looking towards the chart
pattern and study i.e. Bollinger Band, RSI and MACD,
we believe stock price may extend its rally towards Rs. 960/990 levels, whereas
Rs. 824 will act as a strong support level on a closing basis.
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