stock market - BHEL in consolidation phase

BHEL (Rs 2,392.6): The structural uptrend that began in September 2001 in BHEL continues to be in force. The 2008 crash managed to drag the stock down 66 per cent from its all-time high of Rs 2,925. But the stock had then retraced only around 61 per cent of the uptrend from 2001 trough, keeping the long-term outlook positive. The uptrend from October 2008 lows has also been very strong indicating a bullish undercurrent in the stock.

That said the stock is in a protracted sideways consolidation since last June. The positive bias in this sideways move is reflected in the higher peaks and troughs formed within this range. The stock has also managed to move above its key intermediate-term resistance at Rs 2,200 and is holding above this level over the last 11 months.

Investors with a short- to medium-term perspective can hold the stock with the stop at Rs 2,300. There is a possibility of the stock declining to Rs 2,100 or Rs 1,950 over the ensuing weeks. Investors with a longer investment horizon can hold with a deeper stop at Rs 1,940. Near-term targets for the stock are at Rs 2,750 and Rs 2,925.

If the correction in BHEL halts above Rs 1,950, the stock can move on to Rs 3,650 over the next couple of years. Decline below the aforementioned support will keep the stock oscillating between Rs 1,500 and Rs 3,000 over the long-term.

ref:
http://www.thehindubusinessline.com/iw/2010/09/05/stories/2010090551100600.htm