BHEL shares extend gains; what are next resistance and support levels on charts?

Shares of Bharat Heavy Electricals Ltd (BHEL) extended its gains during the trading session on Friday. The company recently signed an agreement to enter into a joint-venture (JV) with state-run mining major Coal India Ltd.

The joint-venture is formed to undertake coal to chemicals business by initially setting up a coal to 2000 TPD ammonium nitrate plant using BHEL’s in-house developed pressurized fluidized bed gasification (PFBG) technology, said the company in the exchange filing. BHEL will own 49 per cent of the JV, while the other 51 per cent ownership will be with Coal India.

Shares of BHEL jumped 4.40 per cent to Rs 237.35 during the trading session Friday, with its total market capitalization of more than 82,000 crore. The stock had settled at 227.45 in the previous trading session Thursday, scaling its 52-week high at Rs 243.30 on February 5. The stock has surged over 250 per cent from its 52-week low at Rs 67.63 apiece.

Technical analysts, tracking the stock, believe that BHEL may rise further and test new record highs once it crosses the hurdle of Rs 240. However, the stock needs to hold the momentum with volumes to make a decisive move, they said.

BHEL is still in the bullish zone on the daily chart pattern, but as an aggressive trader there is still a lack of momentum in the stock currently, said Ganesh Dongre, Senior Manager - Technical Research, Anand Rathi Shares and Stock Brokers. "Traders can buy the stock on dips with a stop loss of Rs 215 for the target price of Rs 255," he said.

As of 1 pm on Friday, more than 10.18 lakh shares of BHEL amounting to Rs 23.86 crore were traded on BSE. Similarly, more than 2.41 crore equity shares worth over Rs 566.26 crore exchanged hands on NSE as of the same time.

The price action in BHEL must surpass the barrier of Rs 240 to breakout on the upside, with resilient volumes. A trigger would set the rally in the direction of Rs 275 -285 levels, which is the next obstacle range, said Avdhut Bagkar, Derivatives & Technical Analyst at StoxBox.

"On the downside, Rs 213 serves as the support mark, its 50-SMA. The present bias implies a sideways trend, which could embark on the new journey once Rs 240 is taken out," he said.

Following the Q3 results of BHEL, Prabhudas Lilladher assigned its a 'reduce' rating with a target price of Rs 200 citing its poor sales growth and margin decline in power segment drives weak quarterly performance. "9MFY24 order inflows came in at Rs 36,050 crore with additional orders worth Rs 20,500 crore booked till date in Q4," it said.