Shares of Cochin Shipyard gathered strong momentum in Friday's trade to scale their upper circuit level, halting a four-day losing run. The stock surged 10 per cent to hit a day high of Rs 1,846.55. At this price, it has delivered multibagger returns by rallying 170.94 per cent on a year-to-date (YTD) basis. Despite the steep rise, the scrip has declined 37.98 per cent from its record high value of Rs 2,977.10, a level seen on July 8 this year.
Defence stocks, including Cochin Shipyard, were in a consolidation phase for the last two and a half months, said Kranthi Bathini, director of equity strategy at WealthMills Securities.
"We are now witnessing some buying interest emerging in these counters. Investors with a long-term view can hold on to defence stocks. Those looking for fresh entry can consider buying them on dips," Bathini added.
Technically, near-term support on the counter could be seen at Rs 1,800, followed by Rs 1,700 and 1,630 levels. On the higher end, resistance may be found in the Rs 1,860-2,050 range.
"Cochin Shipyard has seen a steep correction of nearly 40 per cent from its lifetime high levels and has plunged to oversold terrain on the technical parameters. The swing low of Rs 1,630 is likely to cushion the fall. On the higher end, the stock might see some traction post surpassing the intermediate stiff resistance of the Rs 2,000 mark," said Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One.
"Support will be at Rs 1,700 and resistance at Rs 1,860. A decisive close above Rs 1,860 level may trigger a further upside towards Rs 1,950. The expected trading range will be between Rs 1,700 and Rs 1,950 for the short term," said Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi.
"The stock can hit Rs 2,050 level in the near term. Keep a strict stop loss placed at Rs 1,800. A dip below Rs 1,800 level will negate this view," said Ravi Singh, Senior Vice-President (Retail Research) at Religare Broking.
The counter traded higher than the 5-day, 10- 150-day and 200-day simple moving averages (SMAs) but lower than the 20-day, 30-, 50-day and 100-day SMAs. The counter's 14-day relative strength index (RSI) came at 42.64. A level below 30 is defined as oversold while a value above 70 is considered overbought.
The company's stock has a price-to-equity (P/E) ratio of 49.93 against a price-to-book (P/B) value of 8.79. Earnings per share (EPS) stood at 33.62 with a return on equity of 17.60.
As of June 2024, promoters held a 72.86 per cent stake in the company.