Looking at the daily chart of BHEL, you can see a simple price action pattern which is explained below. (OPEN CHART FOR DETAILED EXPLANATION)
Firstly, it is visible that BHEL has given a brilliant bull trend from December'20.
Presiding the uptrend, an accumulation phase can be seen and then a breakout form that phase caused the uptrend. Now, according to price action theory, the stocks' uptrend is firstly accompanied by an accumulation phase (as marked) and then a uptrend and then a distribution phase (as marked).
Following the distribution phase, weakness is expected in the stock. (OPEN THE CHART FOR ALL THE MARKED PHASES AND LEVELS)
To sum up, BHEL has first seen an accumulation phase, then a breakout from accumulation phase causing a good uptrend and now BHEL is seeing a distribution phase (consolidation after an uptrend).
Hence, it is expected that we can see weakness in the stock in upcoming days, given it breaks the distribution phase rectangle (marked) in a negative way.
If it breaks the distribution phase triangle from upside, one may look for buying opportunities.
I would recommend a 'SELL' signal (50% quantity sell) on BHEL for now.
FOLLOW IF YOU LIKE THE ANALYSIS. LIKE AND COMMENT WHAT YOU THINK ABOUT THIS. COMMENT IF YOU HAVE ANY DOUBT ON THIS ANALYSIS
but this consolidation phase could also be a re-accumulation too right .. we have to see the direction it breaks too see if its accumulation or distribution
Keshav2329
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@joelmodiyil001, Hey! Sure it can be a re-accumulation phase. That's why I have written in the description that you may look for buying opportunities if it breaks from the upper side of the range. But booking a part of profit here is advisable to be on a safer side. If it breaks from the downward range, you may book full profit, and if it breaks from upper range you may add some more BHEL to your portfolio!! Hope I cleared your question. Follow if you like it and please let me know if there is anything else in your mind!! Thanks!!
joelmodiyil001
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@Keshav2329, thank you for the reply ,it did clear my doubt , thanks again
This is not a Short candidate but there is a Flag breakout
Keshav2329
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@TejasParekh43, Hey Tejas! Here, it could be considered as a flag formation breakout only if the stock would have continued its upward rally after the flag breakout. But here rather, it started consolidating between the range of 69 and 75. Hence, we should consider as a distribution or re-accumulation phase depending upon its next breakout, i.e, breakout from the range (69-75). Plus, if you see its last candle that is on 4 June you will see that its high just touched the upper band of our range and saw selling pressure there. Hence, this range is perfectly predicted. Hope I cleared you question. Please let me know if you have anything else in your mind!!