HEG - Technical Analysis with Chart Patterns & Indicators

Last Updated Time : 20 Dec 25, 03:54 pm

Technical Rating: 3.8

📊 Chart Patterns: HEG is trading slightly above its 50 DMA (526 ₹) and comfortably above its 200 DMA (501 ₹), indicating a mild bullish structure. Price is mid-range between the 52-week low (331 ₹) and high (622 ₹), with sellers likely near the upper zone.

📈 Moving Averages:

- 50 DMA: 526 ₹ (near-term support)

- 200 DMA: 501 ₹ (major support)

Staying above both averages favors an upward bias, but follow-through is needed.

📉 RSI: 45.8 → Neutral to slightly bearish; momentum is tentative and not overbought.

📈 MACD: 0.58 → Marginal positive crossover, signaling early bullish momentum.

📊 Bollinger Bands: Price likely near mid-band; volatility contained, consistent with consolidation before a potential move.

📊 Volume Trends: Current volume (2.54 lakh) is below 1-week average (4.37 lakh), indicating weak participation and a need for higher volume on breakouts.

🎯 Momentum Signals:

- Short-term bias: Mildly bullish but cautious due to weak RSI and low volume

- Entry Zone: 515–525 ₹ (close to 50 DMA/near-term pullback support)

- Exit Zone: 605–620 ₹ (resistance near prior highs)

- Breakout above 622 ₹ could target 640–660 ₹.

📌 Trend Status: Trending upward but consolidating; a high-volume move above 600–622 ₹ would confirm trend continuation.

Positive

• Price above 50 DMA and 200 DMA supports a constructive trend.
• Quarterly PAT growth (131 Cr vs 71.8 Cr) shows strong earnings momentum.
• FII (+0.68%) and DII (+0.39%) holding uptick indicates improving institutional interest.
• Low debt-to-equity (0.15) adds financial stability.

Limitation

• RSI is subdued (45.8), reflecting hesitant momentum.
• Volume below average suggests low conviction on rallies.
• High P/E (42.7) versus industry PE (39.0) implies premium valuation.
• Weak ROCE (5.19%) and ROE (3.40%) indicate poor capital efficiency.

Company Negative News

• No specific negative headlines in the data, but efficiency metrics are weak and valuation is rich.

Company Positive News

• Strong quarterly profit growth (+111%) indicates operational improvement.
• Institutional interest rising (FII and DII increases) supports sentiment.

Industry

• Industry PE: 39.0, slightly below HEG’s 42.7, suggesting mild overvaluation.
• Graphite electrodes sector is cyclical, tied to steel production and global pricing.

Conclusion

⚖️ HEG shows a cautious uptrend above key DMAs with early bullish signals from MACD, but needs stronger volume and RSI to confirm. Consider entries at 515–525 ₹ with profit-taking near 605–620 ₹; a decisive breakout above 622 ₹ opens 640–660 ₹. Traders should wait for volume confirmation; investors can accumulate on dips given improving earnings but remain mindful of valuation and low efficiency metrics.