Shares of Cochin Shipyard rose 5% to a record high for the fifth straight session amid a correction in the broader market today. Cochin Shipyard stock hit the upper circuit of 5% at Rs 2977.10 on BSE. Market cap of the defence stock stood at Rs 73,414 crore. However, the stock fell 3% to Rs 2,750 in the afternoon session. The multibagger defence stock has climbed 856% in a year and gained 1649% in two years. It has entered the overbought zone, signals its RSI at 82. The stock closed at Rs 158 on July 7, 2022.
Earlier, Cochin Shipyard stock opened higher at Rs 2849 on BSE. Total 4.05 lakh shares of the firm changed hands amounting to a turnover of Rs 118.27 crore on BSE.
Cochin Shipyard has a one-year beta of 1, indicating average volatility during the period.
The stock has entered the overbought zone, signals its RSI at 82. Cochin Shipyard shares are trading higher than the 5 day, 10 day, 20 day, 50 day, 100 day and 200 day moving averages.
Analysts were mostly bullish on the prospects of the defence sector stock.
Riyank Arora, Technical Analyst at Mehta Equities said, "Technically, the stock has now entered an overbought zone, with the monthly RSI above 90 indicating extreme overbought conditions. We recommend that traders and investors continue to book profits on every rise in Cochin Shipyard. The resistance is near Rs 3,000, with immediate support around the Rs 2650 mark."
Kushal Gandhi, Technical Analyst, StoxBox said, "The price has demonstrated an impressive surge since a bullish breakout in August of last year. The stock has risen by 747% during this period while trading in a volatility contraction pattern. This pattern indicates that the accumulation phase within the parabolic uptrend has strengthened the primary trend and momentum. Compared to its peers and the overall market, the stock displays strong EPS, price strength, and buyer demand. The stock surged by nearly 30% in the last three trading sessions, while volatility remains at lower levels, reducing the likelihood of sudden, erratic movements. Therefore, we recommend buying Cochin Shipyard, with a buy range of Rs 2785-2715 and a target of Rs 3203, along with a protective stop at Rs 2562."
Shiju Koothupalakkal- Technology Research Analyst, Prabhudas Lilladher said, "Among the defence pack, the stock has witnessed a strong bull run in the last 3-4 months with series of higher lows and higher top formation on the daily chart. Recently after taking support near Rs 2100 zone has once again formed a higher low pattern to regain strength and indicated a robust move to make new high scaling Rs 2924 level. The trend is maintained strong and we can anticipate further upward for targets of Rs 3030 and Rs 3220 levels once a decisive breach above Rs 2924 is confirmed. The near-term support zone will be near Rs 2430 levels below which the bias can turn a little bit weak."
Jigar S Patel, manager at Anand Rathi said, "Support will be at Rs 2650 and resistance at Rs 2925. A decisive close above the Rs 2925 level may trigger a further upside to Rs 3100. The expected trading range will be between Rs 2600 and Rs 3200 for the short term."
Mandar Bhojane, Equity Research Analyst, Choice Broking said," The stock is currently trading at an all-time high level. This upward momentum is supported by a consistent pattern of higher highs and higher lows on the daily chart, accompanied by robust trading volume. These patterns underscore a strong upward trajectory in the stock. The Relative Strength Index (RSI) stands at 81 and is on an upward trend, signifying a significant surge in buying momentum. Both RSI and Stochastic RSI in the overbought region suggest that positional traders may consider holding their positions, implementing a trailing stop-loss. The overall trend for the stock is bullish, with confluence from various technical indicators reinforcing the optimistic outlook. Given these signals, there is potential for the stock to achieve a target price of Rs 3750 in the near term. It is advisable to consider buying on dips, particularly around Rs 2500, capitalizing on potential retracements in the stock price. To prudently manage risk, implementing a stop-loss (SL) at Rs 2300 is recommended. This precautionary measure is crucial to safeguard investments in the event of an unexpected market reversal."
Cochin Shipyard Limited is engaged in the shipbuilding and ship repair business. The company is engaged in the construction of vessels and repairs and refits of all types of vessels including upgradation of ships periodical layup repairs and life extension of ships.