Cochin Shipyard shares hit new high after a 300% rally in a year; charts suggest more steam left

Shares of Cochin Shipyard Ltd scaled their new all-time high on Tuesday's trading session as the state-run shipping player surged about 11 per cent in the previous trading session and extended its gains to a new record level of Rs 982.60 in today's trade. However, the stock gave up its initial gains to turn flat as the session progressed.

A couple of brokerage firms, reading the charts of Cochin Shipyard, are positive on the momentum in the counter and see a decent upside of up to 25 per cent in the stock in the coming weeks. They believe that the rally in PSU counters shall be supported by its technical parameters.

According to analysts, Cochin Shipyard has broken its consolidation zone on a closing basis, supported by heavy volumes. The stock is supported by the positive RSI indicators, with a formation of a bullish candle on the charts, and is headed for further upside after the trend reversal in the counter.

Cochin Shipyard broke above a consolidation zone between the Rs 933-750 range on a daily chart with a strong bullish candle, indicating a potential continuation of the medium-term uptrend following eight weeks of consolidation. The increased volume activity observed at the breakout further underscores a surge in market participation, said Axis Securities, seeing up to 25 per cent upside in the stock.

"The stock is maintaining a higher high-low pattern in the medium term and holding above an upward sloping trendline, indicating an uptrend in the medium term. The daily strength indicator RSI is in a bullish mode, holding above its reference line and the 50-mark, indicating a positive bias in the stock. The stock consolidated within a 200-point range, and post-breakout, our target will be set at Rs 1,110-1,185," it said.

Image: Cochin Shipyard Chart (place image here)

Shares of Cochin Shipyard have rallied more than 42 per cent in the year 2024 so far, while the stock has gained over 80 per cent in the last six months. The stock has turned multibagger in the last one year, delivering a more than 300 per cent return to the investors in the last 12 months.

Shiju Koothupalakkal - Technical Research Analyst, Prabhudas Lilladher said that Cochin Shipyard has indicated a big bullish candle formation on the daily chart after a short span of consolidation phase to breach above the previous peak of Rs 945 zone to hit all time high of Rs 976 level during the intraday session.

"The bias has strengthened and with RSI also rising has indicated a trend reversal to signal a buy for next higher targets of Rs 1,020 and Rs 1,115 levels in the coming days. The major support zone would be near the significant 50EMA level of Rs 840," he said.