BHEL shares slip 5% after Ducon Tech initiates arbitration against firm

Bharat Heavy Electricals shares tanked 5 percent on February 18 after Ducon Tech initiated an arbitration against the firm for a claim of Rs 30 crore and other related interests.

Following the news, shares of BHEL slipped to the day's low of Rs 183.57.

On the technical front, Jigar S Patel, Senior Manager - Equity Research at Anand Rathi identified a bullish setup for BHEL, stating that the stock formed a bullish engulfing pattern near a key support level, reinforced by RSI divergence. "This pattern led to a 10 percent rally before a pullback, but the low of the engulfing pattern held firm, supported by the emergence of hammer candlesticks, indicating strong buying interest at lower levels," he said.

Additionally, Patel believes that the confluence of bullish candlestick patterns, RSI divergence, and proximity to a key pivot level suggests a favourable setup for an upward move. On that account, he suggests traders to consider entering long positions in the stock around the Rs 190-193 range, with a target of Rs 222 and a stop-loss at Rs 176.