Bharat Forge, HAL, BEL : Defence-related stocks poised for an upside

defence
After coming out with a draft policy on defence (DPEPP 2020), the Ministry of Defence has published a detailed list of 101 specific weapons/ platforms/equipment, imports of which will be restricted in a phased manner over the next five years.

Most defence-related stocks gained ground on Monday post the development with Bharat Dynamics up nearly 8 per cent at Rs 452 on the BSE. The stock hit an all-time high of Rs 465.10 during the session. READ MORE HERE

Here are some stocks from this segment that look good on the charts.

Bharat Forge Ltd (BHARATFORG): The stock has stabilised above the 200-days moving average (DMA), which in turn has strengthened the up move. Bharat Forge even managed to fill the gap down range it witnessed in March, 2020. The trend is likely to sustain and could see buying momentum. Support stays at Rs 412 on a closing basis, while intra-day support comes in at Rs 400 levels. Although, the Relative Strength Index (RSI) has entered overbought territory, the Moving Average Convergence Divergence (MACD) has remained unchanged with a positive crossover above the zero line. CLICK HERE FOR THE CHART

 

Hindustan Aeronautics Ltd (HAL): Although, the overall trend on price “strength” indicates a strong upside, the volume has not been so attractive. The stock has gained on its own. However, if the move going ahead is suported by volume as well, the trend may sustain and HAL may hit Rs 1,100 levels. It is very unlikely that HAL will see a strong corrective move as a “Golden Cross” with a breakout above Rs 980 levels indicates further upside, charts suggest. From a broader perspective, Rs 950 stays as a strong support on a closing basis. CLICK HERE FOR THE CHART

 

Bharat Electronics Ltd (BEL): With an up move of over 11 per cent on Monday, the counter has reached near 200-weekly moving average (WMA) currently at Rs 113.80 levels. Going forward, a strong move above the resistance may see the stock hit Rs 140 in the medium-term. The daily chart indicates a consolidation breakout in the range of Rs 105 to Rs 92 levels, which should attract more buying. The closing basis support stays at Rs 102 and till BEL trades above the support, there is a strong chance that the upside momentum will sustain.  CLICK HERE FOR THE CHART

  

Larsen & Toubro Ltd (LT): When one closely looks at the MACD, the technical indicator seems to be resilient and refuses to fall below the zero line. As it tries to gain ground, the support levels will limit a meaningful downside. Till this counter trades above Rs 900 levels, the price can retest the recent high of Rs 995. Volumes have remained subdued, but should see an acceleration above Rs 1,000 levels. CLICK HERE FOR THE CHART

 

Bharat Dynamics Ltd (BDL):  This counter has seen selling pressure above Rs 430 levels. Till that does not get crossed convincingy, the upside remains capped. Support remains at Rs 420 levels. Volumes have remained subdued and need to be closely watched. CLICK HERE FOR THE CHART



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