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Observability is analyzed for the target tracking with bearings-only measurements (BOM) applied to a passive homing missile system using augmented proportional navigation guidance (APNG). Based on the analysis, a practical homing guidance law is proposed to enhance observability for tactical missile applications. The new guidance law is tailored to provide oscillation of line-of-sight (LOS) angle induced by initial missile heading errors without sacrificing terminal effectiveness. Simulation studies indicate that the proposed guidance law provides convergence of the state estimates essential to homing guidance applications as well as terminal effectiveness.