Shares of Cochin Shipyard are in a bull run, rising 16% in the last six sessions. Cochin Shipyard stock, which stood at Rs 1629.55 on September 9 closed at Rs 1889.90 on September 17. The short term upmove can be attributed to a rally in the defence sector stocks.
Last weekend, defence minister Rajnath Singh cleared the new Defence Procurement Manual (DPM) 2025, which boosted sentiment in the defence stocks.
The sentiment in the sector received another boost amid reports the Ministry of Defence has received and begun discussions on a proposal from the Indian Air Force to acquire 114 ‘Made in India’ Rafale fighter jets. The deal is estimated to be worth over Rs 2 lakh crore.
Despite the ongoing up move, the stock is down 14% in three months.
The multibagger defence stock rose 241.61% in two years and gained 885% in three years.
Brokerage Anand Rathi is bullish on the defence stock with a target of Rs 2,200. It recommends buying the stock with zero debt on its books with a stop loss of Rs 1,600.
“After a decisive correction, Cochin Shipyard has found support near its 200 DEMA and 200 DSMA. We are witnessing a triple bottom formation around these long-term moving averages placed near Rs 1600 levels. The stock has finally broken out of a bullish inverse head & shoulders pattern, indicating strength. We advise traders to accumulate in the Rs 1,820-1,780 range for an upside target of Rs 2,200, with a stop loss at Rs 1,600,” said the brokerage.
LKP Securities’ Senior Technical Analyst Rupak De has a price target of Rs 1,900 on the defence stock. Stop loss can be fixed at Rs 1700.
“Cochin Shipyard witnessed a strong recovery after a prolonged decline, as the stock surged with heavy volumes. The price has managed to reclaim the 21-day EMA (exponential moving average), reflecting a shift in momentum towards the bulls. On daily charts, the large bullish candle indicates strong buying interest from lower levels. Meanwhile, the RSI (Relative strength index) has also moved higher, suggesting rising strength in the trend. Going forward, a sustained move above Rs 1,750 could open the gates for Rs 1,850-1900 on the higher side, while immediate support is placed around Rs 1,700,” said De.
The multibagger stock is neither overbought nor oversold on charts, indicates its Relative strength index (RSI). The RSI stands at 68.5. A RSI above 70 signals the stock has more buyers than sellers in the market and below 30 indicates more sellers than buyers for a stock.
As per short term and long term trend in terms of moving averages, the stock has been in the green. Cochin Shipyard shares are trading higher than the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages.
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.