Short-term perspective can sell the stock of BHEL at CMP

Investors with a short-term perspective can sell the stock of BHEL at current levels. The stock’s intermediate-term uptrend that started from the August 2013 low of Rs.100 came to a halt encountering a key resistance in the band between Rs.290 and Rs.300 in early February this year. Subsequently, the stock changed direction and has been on a medium-term downtrend since then.

In mid-March, the stock fell sharply breaching a key support and its 200-day moving average at around ₹250. The stock trades well below its 50- and 200-day moving averages. On Tuesday, the stock tumbled 5 per cent with above average volumes conclusively breaking another significant support level at Rs.227. The daily relative strength index has entered the bearish zone from the neutral region. The stock can extend the ongoing medium-term downtrend and reach the price target of Rs.213 and then Rs.209 in the upcoming sessions. Sell the stock with a stop-loss at Rs.227.5.