BEML, formerly Bharat Earth Movers Limited's stock price has rallied more than 100 percent in a year compared to a 55 percent rally in the Nifty during the same period.
This year, too, BEML has outperformed the benchmark index, up by about 40 percent compared to over 12 percent rally in the Nifty and 17 percent gains in the BSE 500 index.
With a market capitalization of more than Rs 5,000 crore, BEML hit a fresh 52-week high of Rs 1,544 on March 9, 2021 and has been consolidating since then.
After forming a bottom at Rs 1,130 on April 26, 2021, however, the stock is on track to surpass fresh 52-week highs and hit a possible target of Rs 1,600 in the next 2-3 months, suggest experts.
Long-term investors should stick with the stock. The initial target to watch out for would be Rs 1,550 and a stop loss to keep for long positions would be below Rs 1,200, they said.
BEML Limited is a public sector undertaking (PSU) for the manufacture of rail coaches and spare parts and mining equipment at its Bangalore complex.
The company has partially disinvested. Presently the government of India owns 54 percent of total equity, while the rest 46 percent is held by the public, financial institutions, foreign institutional investors, banks, and employees, said the company website.
On the technical front, BEML has picked up well from the low of around 600 level during November 2020 to scale the peak of 1,542 in the month of March 2021, gaining almost 157 percent.
Said Vaishali Parekh, Assistant Vice President- Technical Research at Prabhudas Lilladher Pvt. Ltd:
“We have witnessed a short correction recently to bottom out near 1,130 and gradually it has started picking up momentum to anticipate another upward move in the coming months.”
The stock has made a higher bottom formation pattern in the daily chart recently and an upward move past the significant 50 EMA (exponential moving average) of 1,175 has improved the bias and strengthened the trend.
The RSI (relative strength index) indicator hovering near the 50-55 levels is well placed and is in a good zone with much potential for further upside movement and thus justify positive bias recommendation.
“Currently it has maintained above the trendline of 1,290 levels forming a good support and a further upside above 1,540, a decisive move, shall bring about a breakout for the fresh upward journey,” highlighted Parekh.
She further added that BEML is among the best stocks in the midcap counter and can be recommended for investment purposes for a time frame of 2 -3 months for an initial upside target of around 1,550-1,600 and a further breakout would carry it to near 1,700-1,750 levels.
“The near-term support would be near the 50 EMA level of 1,280 while the major support lies near the Rs 1,150 level,” added Parekh.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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