Bharat Forge, part of the casting and forging industry from capital goods space, has rallied more than 20 per cent in a month and technical indicators suggest that the momentum is intact which could take the stock towards Rs 1,000 levels in the next six months.
The stock with a market capitalisation of more than Rs 36,000 crore rose from Rs 633 recorded on July 12 to Rs 790 as on 12 August which translates into an upside of nearly 25 per cent in a month.
Short-term traders can look to buy the stock now or on dips for a possible target of Rs 1,050-1,400 in the next six months which is higher than its current 52-week high of Rs 848 recorded on 10 November 2021, suggest experts.
The stock has been on buyers’ radar so far in 2022, but it picked up momentum in the last three months. The stock has risen by about 10 per cent in a week which resulted in a strong bullish candle on weekly charts, and nearly 30 per cent in the last three months, Trendlyne data showed.
Last week, the auto components maker reported a consolidated net profit of Rs 160.37 crore for the first quarter ended June 30. Its consolidated revenue from operations during the period under review stood at Rs 2,851.46 crore. Also Read
Reacting to the results, CLSA upgraded
to outperform post Q1 results with a target price of Rs 799. Also read
Most technical indicators such as KST, William %R & MACD have generated a primary buy signal which is a positive sign for the bulls.
On the price front, the stock is trading above most of the short and long-term moving averages such as 10,20,30,50,100 and 200-DMA which is a positive sign for the bulls.
“The stock price (Bharat Forge) started its up move from Rs 208 (April 2020) to Rs 848 (Nov2021), making a series of higher bottoms and higher tops. During the move the stock continuously traded above the averages,” Bharat Gala, President – Technical Research,
“The KST, William % R & MACD indicators have generated a primary buy signal. William % R reflects the level of close relative to the highest high for the look back period,” he said.
Know Sure Thing or KST is a momentum oscillator which is used to identify trade signals for traders. A buy signal is generated when KST holds above the zero line — confirming the uptrend.
“The possible targets are Rs 1,050-Rs 1,400 in the next 6 months. If the stock price corrects downwards the buy levels are Rs 749-720-696-672-659. A stop loss to be observed in the trade is Rs 595,” recommends Gala.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)