Technical check on Bharat Electronics before earnings

The Indian government-owned aerospace and defence company, Bharat Electronics, will report its Q1FY21 result on Monday. Here is a sneak-peak to the stock’s technical position.

Technically, the stock has given a downward sloping trendline breakout as on June 19, 2020, and thereafter, witnessed almost 36 per cent upside. After registering a high of Rs 105.40, the stock has witnessed a minor correction. During this corrective phase, the volume was mostly below the 50-day average, which suggests its routine decline after a robust move. The correction is halted near 23.6 per cent Fibonacci retracement level of its prior upward move (Rs 57.75- Rs 105.40), which coincides with the short-term 13-day EMA level.

Currently, the stock is trading above its 20-day EMA (95.40), 50-day EMA (86.75), 100-day EMA (83.45) and 200-day EMA (85.90), which indicates a medium and long-term uptrend. The leading indicator, 14-period RSI, is in a super bullish zone. The stochastic oscillator is also suggesting some bullish strength as per cent K is above the per cent D.

Going ahead, the stock has strong resistance placed in the region of Rs 106-Rs 109, and a sustainable move above this resistance zone would open gates for an upmove towards the levels of Rs 113-Rs 116. While any move below the levels of Rs 94, would be negative for the stock.