About the company:
Bharat Forge Ltd (NS: BFRG ) belongs to the $3 billion Kalyani Group. The company manufactures and sells forged and machined components for the auto and industry sectors. Apart from the forging industry, the group has its presence in engineering steel, automotive, industrial, renewable energy, urban infrastructure, and specialty chemicals. The stock is trading at a 3.8% discount to its 52-week high level. The 52-week high and 52-week low range is Rs 847 – Rs 477.
One week time frame: (Chart 1)
On a weekly time frame, we can see, from the below chart that BFL stock has made a long-term Rounding Bottom pattern. We can also see that the share has been consolidating in an Ascending Triangle pattern since May 2021. While consolidating in this pattern the scrip has broken an important resistance level of Rs 789 and is trading above it. We anticipate the share to further move higher with the help of higher volumes. Relative Strength Index (or RSI) is above 60 and the Moving Average Convergence Divergence line is in process of crossing the signal line from below. It denotes positive momentum in the scrip. Long-term traders can enter at current levels by keeping a stop loss at Rs 706 on a weekly closing basis.
One day time frame: (Chart 2)
On a daily time frame, BFL stock has made a Rounding Bottom formation. The scrip has a resistance level of Rs 824. It is most likely to test this resistance level for the fourth time since July 2021. The share has taken support on the 50-day EMA line. We anticipate seeing an upward move from here supported by an increase in volumes. RSI is above 60 and the MACD line has crossed the signal line from below. It indicates positive momentum on the share. Positional traders should enter once the scrip crosses Rs 824 level and stays above it. They should maintain the stop loss at Rs 740 on a daily closing basis.
We expect Bharat Forge stock to maintain positive bias and head higher in subsequent sessions. Short-term traders should enter at the current level by keeping a strict stop loss at Rs 791 on a daily closing basis.
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