Stock Pick for Tuesday, July 20, 2021

  • Stock Market Analysis

In the previous session, the Nifty Index saw a deeply negative opening in the morning session and extended losses as the day progressed. The Index formed a Doji candle on the chart and closed with a net loss of 171 points. Technically, The Nifty index closed below the Middle Band Bollinger on the chart which indicates more weakness. Hence a highly cautious approach is advisable for the next trading day.

Indian Stock Market has entered into a negative zone. The market would be considered bearish until it holds below 15904 for Nifty and 35590 for BankNifty . Following Stock has seen a technical breakout in the falling market and traders can go long in this stock at dips.

Bharat Electronics (NS: BAJE ) Ltd

NSE:BEL   BSE:500049  Sector: Consumer Durables

In the last trading session, BEL stock made a new 52 week high near 187.75 levels. In the daily time frame, the stock has given a breakout above ‘Bullish Flag Pattern’. It’s a continuation pattern that looks similar to flag and flag pole. It occurs when the prices enter into the consolidation phase after a sharp rise movement. On the above chart, we can see a V pattern rise in the stock since June 2021 which formed a Flag pole. After that stock consolidated into a rectangular range between 188-177 levels and formed a formation called Flag.

In addition, the Stock is comfortably closed above the 20-day exponential moving average which will act as key support for the stock. Also, the up move has been supported by the ADX indicator as +DI is moving above -Di on the daily chart whereas ADX is placed near 52.

In short, BEL looks to be positive now. Break above the previous day’s high near 187.75 levels will confirm the trend and could take prices towards 192 and 211 levels. On the downside stop loss can be placed below 177 levels. To avoid risk, it is best to book partial profits near 192 levels and then trail stop to cost.

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