Missed the Nifty Rally? Its Time to Enter Capital Goods Stocks

If you have missed bull run of Nifty from the level of 4700 to the current level on 6050, then there are few sectors where you can take position in. Capital good in one such sector that has not taken part in this rally, because of many negative news in the past. All the negatives are factored in most of the stocks and this is the right time to accumulate at the current levels. 

1. BHEL

Fundamentally BHEL is a strong company. BHEL is a heavy weight in the capital good sector, which has not performed well due to lots of negative news in the past. All those negative are now factored in the stock. Apart from being a capital good major, bhel is also a bigger power plant equipment manufacturer. As the government is paying attention to the power sector, this is going to benefit bhel also. It is expected that its order book will grow.

bhel chart buy

Technically the stock is at the important support levels. At the current level one can go long. The stock has has strong support around Rs 215-220. Don’t expect stock to break those levels. The macd histogram is signaling the bottoming of the the stock. One can buy at current level of 225 with a stop loss of 210 and for a target of 240, 255 and 270

2. L & T

L& T is the head in the capital good sector. It has declined substantially after the news of less order inflow,  concerns of losing road project and down graded to neutral by citi . All the things are factored in the the current stock price . The stock is currently trading at important short term support level. Buy at the current level of 1537 and on dips with a stop loss of 1460 and target of  1585/ 1650 / 17 00 / 1800  in the next 3 to 6 months

L & T fundamental and technical analysis

3. Crompton Greaves

Crompton Graves in a mid size company in the capital good sector. It has recently tested the 52 week low of 105  due to poor results of previous quaters. 105 is a very strong support level. It has recently signed Mou with Gujarat government  and is going to acquire the lighting division of Karma Industries. This is going to give a big boost to the company profitability. One can acquire at the current market price of 114 and on dips with stop loss of 104 and targets of 125/ 138 / 148

cropmton greaves chart

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