Bharat Electronics gives trendline breakout

The stock of Bharat Electronics Limited has given a downward sloping trendline breakout, formed by connecting swing highs from March 2020. The breakout was supported by above 50-day average volumes. Additionally, the stock formed a sizeable bullish candle on the breakout day, adding strength to the breakout. 

Currently, the stock is trading above its short and medium-term moving averages, i.e. 20-day EMA, 50-day EMA and 100-day EMA. The stock's relative strength index (RSI) has reached its highest value in the last 14 days, which is a bullish sign. Also, it has managed to close above its previous swing high. The stochastic oscillator is also suggesting some bullish strength as per cent K is above per cent D.

Moreover, ADX is very strong at 26.57. The -DI is much below +DI and ADX is above -DI and +DI. This shows a technical strength in the stock. 

Going ahead, the zone of Rs 74.30-Rs 73 is likely to act as a good support as eight-day EMA and 13-day EMA are placed in that region. While on the upside, the level of Rs 88.50, followed by Rs 96, would be seen as the next resistance zone for the stock.

On Friday, the stock of Bharat Electronics closed at Rs 81 per share, surged by 5.40 per cent. The stock opened at Rs 77.45 per share and hit an intraday high of Rs 81.50 and a low of Rs 76.45 per share on NSE.