Why This LIC-Backed Navratna Stock Is Buying Opportunity On Breaking 11-Week Consolidation?

Hindustan Aeronautics Ltd (HAL) is a Navratna CPSE on which ICICI Direct Research has bullish eyes. As per the brokerage Hindustan Aeronautics has undergone a consolidation over the past eleven weeks and the next price action will be a buying opportunity for investors. The brokerage has suggested to buy the stock at Rs 3900-3980 level, keeping a stop-loss of Rs 3695 which may trigger the price movement to hit a target price of Rs 4500 in 3 months.

"Defense stocks have been key outperforming theme over past one year and many defense PSUs continue to remain in structural uptrend as they form a sequential higher high-low formation on multiple time frames. Hindustan Aeronautics has undergone a consolidation over past eleven weeks within its primary uptrend and price action suggest that next up move is about to begin providing opportunity to enter into stock with favourable riskreward setup," said th research analysts of ICICI Direct.

Commenting on the outlook of HAL, they said in a note that "Structurally, share price is witnessing stronger rallies and shallower corrections, which is a hallmark of extended uptrend. We observe that there is a peculiar pattern of forming higher base around 10-week ema on several occasions since beginning of CY22. This is a clear sign of continued buying interest in the stock at elevated levels. We expect share price to break out of eleven weeks of consolidation and head towards Rs 4500 over next few months as it is implication of June rally (3100-3900) projected from August 23 lows of 3715 (3715+800=4515)."

On Friday, the shares of HAL closed on the BSE at Rs 4105.65 apiece up by 1.63% over the previous close of Rs 4039.65. The stock made a 52-week-high of Rs 4,139.00 on (08/09/2023) and a 52-week-low of Rs 2,242.00 on (28/09/2022). During Q1FY24, the company recorded promoters shareholding of 71.64%, FIIs stake of 11.90%, DIIs stake of 10.64% and public stake of 5.81%. In the April to June 2023 quarter, insurance giant LIC held 97,87,760 equity shares or 2.93% stake in the company.

Disclaimer

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