Stock of the week - Bmel has been one of the strongest outperformer in the previous week By GEPL Capital
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Stock of the week
Observation
* BMEL has been one of the strongest outperformer in the previous week.
* The stock ended the week with a gain of (10.45%) while the NIFTY ended the week with a loss of (-3.02%). The stock not only breached above 1068 (important resistance level) but also ended the week above it. This break out was backed by above average volume, indicating participation as the prices breach above multi week highs.
* On the indicator front the ADX plotted on both the daily and the weekly charts can be seen moving higher, indicating strength in the up move. Similarly, RSI plotted on the daily and the weekly time frame can be seen rising, indicating presence of momentum in the up move.
* The long term moving averages in the daily time frame are as follows 50 Day SMA (957), 100 Day SMA (808) and 200 Day SMA (724). Currently the prices are placed above all the major averages.
* The immediate resistance for the stock is placed at 1180 (61.8% extension level of the rise from 584.40-1053 projected from 888.10) followed by 1256 (78.6% extension level of the rise from 584.40-1053 projected from 888.10) and eventually towards 1356 (100% extension level of the rise from 584.40-1053 projected from 888.10).
Inference & Expectations
* BEML in the previous week outperformed the NIFTY by a huge margin.
* The chart pattern, price analysis and the technical parameters all point towards the possibility of the prices moving higher and testing fresh 52 week highs
* Going ahead we expect the stock to move higher towards 1180 immediate, if the prices sustain above this level we might see the prices move higher and test the 1256 followed by 1356 mark.
* Our bullish view will be negated only if the stock closes below the 1020 level, beyond which we might see the prices move lower towards 888 mark.
BEML: 1078.95 weekly change (10.45%)
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