BHEL Maharatna Company
There is a saying in Wall Street “Kid with a ruler and pencil can make money” from the market. Maharatna company Bharat Heavy Electricals Ltd. BHEL stock price chart is a text book example of how Trend Line traders can make killer by the simple method. Every bounce was resisted by downward sloping trend line indicating the clear downtrend. This started in early November 2010 and resumed in July 2015 after pullback rally.
Recently stock broke Monthly supporting Trend line (Green Line in the chart) and trading near psychological level of 100. Any pull back from this level towards 119-127 levels can attract further bear attack. It may result in pull down of the stock towards 83-68 levels.
The stock price is trading at 30% discount to Book Value. From past three years, company profit is in sharp decline owing to the fact that profit margin is shrinking below double digit. Adding fuel to fire company declared loss and Trailing Twelve Month (TTM) profit for the year is in negative zone. Total liabilities are increasing and promoter holding is decreased. Having so many uncertainties in future, it’s better to wait and watch for clarity to emerge, than enter the counter and hope for the best.
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Registration Status: I am not a SEBI registered Research Analyst.
As per SEBI (RESEARCH ANALYSTS) REGULATIONS, 2014 and clarifications provided by SEBI “Any person who makes recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations.”
Disclaimer: I do not hold any position in BHEL.