BHEL shares hit 14-year high, up 9% intraday; is the upside capped?

Shares of multibagger Bharat Heavy Electricals Ltd (BHEL) hit their 14-year high in early deals today. The PSU stock also touched its 52-week high for the sixth straight session today , signaling strong investor interest in the multibagger stock. The stock rose 9% to a high of Rs 318.15 on BSE. However, the BHEL stock is still down 18% to the record high of Rs 390.69 on BSE. BHEL shares fell to a 52-week low of Rs 77.20 on May 29, 2023.

The rally in BHEL shares comes as brokerage Nuvama expects AMFI to include the PSU stock to the largecap category in the forthcoming June rejig. Sentiment is also positive around the stock as the company on May 30 inked a Strategic Partnership Agreement (SPA) for the railway signalling business with HIMA Middle East FZE, Dubai, a wholly owned subsidiary of HIMA Paul Hildebrandt GmbH, Germany.

Total 25.84 lakh shares of the firm changed hands amounting to a turnover of Rs 73.40 crore.

The PSU stock has risen 259.42% in a year and gained 57.57% in 2024.

With the current leg of rally, the multibagger stock has entered overbought zone on charts, signals its relative strength index (RSI), which stands at 77.4. BHEL shares are trading higher than the 5 day, 10 day, 20 day, 50 day, 100 day and 200 day moving averages.

Market cap of the power equipment maker climbed to Rs 1.09 lakh crore.

Avdhut Bagkar, Derivatives & Technical Analyst at StoxBox is bullish on the stock with a price target of Rs 330.

"The stock must display stability over the key selling level of Rs 280, to enter fresh leg of breakout. Until that happen, the price action may retest the support of Rs 265 -260, its accumulation zone, as per the daily chart. The broader outlook remains optimistic, however fresh rally appears once the critical hurdle of Rs 280 is taken off with aggressive volumes. Above 280, the stock may rally to Rs 325-330 levels," he said.

Osho Krishan - Senior Research Analyst - Angel One said, "BHEL has been in a stellar bull run, hovering near its 52-week highs. The stock has gained strong traction in the last couple of trading sessions as it surpassed the previous swing high. On the levels front, the zone of Rs 265-260 should provide cushion to any short term blip, while the strong support is placed around Rs 255-250 subzone. On the higher end, the zone of Rs 284-285 is likely to showcase resilience, and a sustainable breakthrough could only trigger the next leg of rally in the counter.”

Abhijeet from Tips2trades said, “BHEL stock price is bullish but also very overbought on the Daily charts with next resistance at 339. Investors should keep booking profits as Daily close below support of 303 could lead to a fall till 261 in the near term."

BHEL is one of the largest engineering and manufacturing companies in India engaged in design, engineering, construction, testing, commissioning and servicing of a wide range of products and services with over 180 product offerings to meet the ever-growing needs of the core sectors of economy.