Chart Check: 140% rally in a year, this stock is set to fly high post breakout on weekly charts

Bharat Dynamics, part of the aerospace and defence industry, has rallied by over 140 per cent in the last one year and the technical setup suggests that the momentum is likely to continue.

Medium-term traders who missed the rally last year can still look at buying the stock now for a possible target of about Rs 1,400 in the next six months, suggest experts.

Bulls remained largely in control of the stock so far in 2022. It rose more than 7 per cent in a week and over 11 per cent in a month.

Bharat Dynamics is a public sector undertaking under the Ministry of Defence. It makes guided missile systems and allied equipment for the Indian armed forces.

The stock recently gave a breakout on the weekly charts which auger well for the bulls. The stock consolidated in a range of 300 points where Rs 600 acted as strong support while on the upside Rs 900 acted as a strong resistance.

Bharat Dynamics broke above the Rs 900-level last week, and since then has been sustaining above the same which suggests strength in the momentum. The stock hit a fresh 52-week high of Rs 978 on 19 September.


On the price front, the stock is trading well above the short- and long-term moving averages such as 5,10,30,50,100 and 200-DMA which is a positive sign for the bulls.

The relative strength index (RSI) is at 68. RSI below 30 is considered oversold and above 70 is considered overbought, Trendlyne data showed. MACD is above its center and signal line, this is a bullish indicator.

The stock price started its up move from Rs 370 (December 21) to Rs 905 (April 2022), making series of higher tops and higher bottoms taking support of averages and super trend trending in positive mode.

“Bharat Dynamics witnessed profit booking from the peak, but the stock formed higher bottoms at Rs 609 and Rs 649 and on few occasions tried to cross an all-time high of Rs 905 but failed in the process,” Bharat Gala, President - Technical Research, Ventura Securities, said.

“The demand index, Aroon Up & Down & William % R Indicators indicate buying strength in the stock,” he said. Demand index indicator suggests a firm buying interest in the stock.

“Recently, the stock gave a positive weekly candle breakouts making a new high of Rs 976. The possible targets are Rs 1,400 in the next 6 months. If the stock price corrects downwards the buy levels are Rs 910-870-837-804-785. A stop loss to be observed in the trade is Rs 730,” recommends Gala.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)