Technical Bits: BHEL gives trendline breakout on weekly scale

Bharat Heavy Electricals has given a downward sloping trendline breakout formed by connecting swing highs from October 2010, considering the weekly time frame. The breakout was supported by robust volumes. Additionally, the stock formed a sizeable bullish candle on breakout day, which adds strength to the breakout.

 The stock is trading above its short and long-term moving averages, i.e. 20-day EMA, 50-day EMA, 100-day EMA and 200-day EMA, which suggests that the stock is in a short-long term uptrend. The 14-period RSI on the weekly chart is quoting at 58.64 and it is trading above its 9-day average, which suggests a good momentum, going forward. On the weekly chart, the fast stochastic is also trading above its slow stochastic line. Additionally, The daily ADX is very strong at 27.22. The -DI is much below the +DI and ADX is above the -DI. This shows the technical strength of the stock.

 However, in the near-term, the zone of Rs. 68.40- Rs. 67.50 is likely to act as major support as short-term moving averages, i.e. 13-week EMA and 20-week EMA is placed in that region. While on the upside, the stock is likely to face resistance near 100-week EMA, which is currently placed at 80.65

 On Friday, the stock of Bharat Heavy Electricals closed at Rs. 74.90 per share, surged by 4.76 per cent. The stock opened at Rs. 71.80 per share and hit an intraday high of Rs. 75.40 and a low of Rs. 71.80 per share on NSE.