Bhel is recovering on the basis of news that the government is likely to unload part of its holding in the company. Bhel is a strong play on the infrastructure and power sector. It has been enjoying a 10 per cent concession, I believe, on orders which helped it have a competitive edge. It is not clear if this advantage will remain if it is privatised.Yet, change of hands to the private sector could change the profile of the company. The scrip had dipped below the low of Rs 159 posted in April 1999. On its rise now, it has a resistance at Rs 160. But if that is cleared, it could rise to Rs 182, which is a more formidable resistance.
Should the recovery proceed, it could advance to the level of Rs 205, which has been a kind of a more stable baseline. This line had broken down after holding out for some time.
The daily stochastic has signalled a buy, but it has been languishing in a web in the oversold region for a while. And therefore, some more confirmation may be called for! Get in, you have nothing much to lose. Keep a stop loss at Rs 143.
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