Monday 6 October 2008

Sell BEML



CMP: Rs 583.30

We recommend a sell in BEML from a short-term trading perspective. It is clearly visible from the charts of BEML that it has been on a downtrend from its December 2007 high of Rs 1,849. Since then the stock has been forming lower bottoms and lower peaks.

However, during July the stock found support at Rs 600 and made a corrective up move to Rs 845 levels. After encountering resistance around Rs 845 in early September, the stock resumed its downtrend. On October 6, the stock tumbled 10 per cent with above-average volumes, breaking through the key support level of Rs 600. BEML is trading well below its 21- and 50-day moving averages.

The daily and weekly relative strength indices are featuring in the bearish zone. Moreover, the daily moving average convergence and divergence is declining in line with the price in the negative territory. Our short-term forecast for the stock is negative. We expect the stock’s downtrend to prolong further until it hits our price target of Rs 522 in the upcoming trading sessions. Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 613.

Source: Hindu Business Line

Posted by Harsh at 20:32

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DISCLAIMER: The author is not a registered stockbroker nor a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity, index or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. The author recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and that you confirm the facts on your own before making important investment commitments.