BHEL - Technical Update

BHEL is entering into a nice support zone. A few points for consideration

• The stock has just broken 200 day average in this downfall. Not a good sign for the stock as it normally triggers a 'sell'
• The current zone was a tough one to break last time when it wanted to move upwards as has been highlighted in the box.
  
• MACD is still on the sell side and the RSI is just about inching towards a safe zone.
  
• The volumes as indicated in the Accumulation Distribution chart shows a a spurt in selling in this downfall

Looking at all these signals, one should look at this stock with caution and not enter in a hurry with this correction. On a fundamental basis, this stock is slightly stretched and though this has a clear advantage with its products, new entrants from China esp. can create some downside pressure.

I would look at this current levels of support and if it is breaches convincingly one needs to take a call on the stock. Downside targets would be, if it breaches 2350 it will see the next resistance in the range of 2250. On the upside, if it breaches 2500, then the target would be at 2650.