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Shares of Bharat Electronics Ltd. (BEL), a leading defense public sector undertaking (PSU), have exhibited significant growth over the past year, surging by a remarkable 165%. This impressive performance has continued into the current year, with the stock registering a gain of over 80%.
Market expert Ashish Bahety believes that the positive momentum in BEL shares is likely to persist, potentially pushing the stock price to ₹400 per share in the future. He identifies a short-term target of ₹360, suggesting that a breach of this level could open the door for further gains, potentially reaching ₹400. However, Bahety advises investors to maintain a stop loss at ₹320 to manage potential downside risk.
Bahety's bullish outlook is rooted in the positive chart structure of BEL. He observes that the stock's technical indicators are favorable, and he anticipates a continuation of the upward trend, particularly in the defense sector, leading up to the upcoming budget. The expectation is that the budget may contain announcements that could further boost sentiment and drive growth in defense-related companies.
Beyond the upcoming budget, Bahety believes that BEL's growth trajectory remains promising, making it an attractive investment option for investors seeking exposure to the defense sector. He highlights that the stock has delivered positive annual returns every year since 2018, with the exception of a 52% decline in 2018.
Despite its recent surge, BEL's relative strength index (RSI) stands at 70.5, indicating that the stock is trading in overbought territory. This suggests that a pullback or correction might be on the horizon. Additionally, the stock's one-year beta of 1.5 highlights its high volatility, implying significant price fluctuations in the past year.
BEL's current price action is supported by its strong performance against various moving averages. The stock is trading higher than the 5-day, 20-day, 50-day, 100-day, 150-day, and 200-day simple moving averages (SMAs), indicating a sustained upward trend.
BEL shares closed today at ₹333.35, down 0.15% on the day. However, the stock has recorded a strong gain of 16% over the past month. The positive outlook on BEL shares stems from its strong fundamentals, favorable market conditions, and the potential for further growth driven by government initiatives and the overall positive sentiment in the defense sector.
Source: BEL shares may jump to ₹400, provided it crosses a short-term target of this chartist