The stock rose from Rs 749 as on 20th February 2023 to Rs 2136 recorded on 20th February 2024 that translates into an upside of 185% in a year.
The 100-EMA has proved to be an important support for the stock multiple times. The stock breached this moving average back in February 2023, but it quickly recovered in May 2023 and since then it has acted as an important support.
Short-to-medium-term traders with a high-risk profile can look to buy the stock for a bounce back towards 2500 levels, suggest experts.
The stock hit a record high of Rs 2,490 on 16th January 2024, but it failed to hold on to the momentum. The stock is now hovering around the 100-EMA support placed at Rs 2,131.
“Over the past year, the Mazagon Dock Shipbuilders stock has found support three times at the 100-day Exponential Moving Average (EMA) on the daily chart,” Suraj Bathija, Founder & CSO at AlgoBulls, said.“The stock has received robust support from an upward trending line, with daily RSI consistently above 40, affirming this support,” he said.“Additionally, on the weekly RSI, a hidden divergence pattern has emerged, indicating a bullish trend on higher time frames and reinforcing the daily patterns,” highlights Bathija.
In terms of price action, the stock is trading below 5,10,20,50 and 100-DMA on the daily charts but above 200-DMA.
The daily Relative Strength Index (RSI) is at 44. RSI below 30 is oversold and above 70 is considered overbought, Trendlyne data showed.
After a strong rally in the last year, the stock is going through a price-wise and time-wise correction.
From a fundamental perspective, Mazagon is a debt-free company, boasting a strong 3-year compound annual growth rate (CAGR) in sales of 26% since March 2022.
“Furthermore, its 3-year CAGR in net profit stands at an exceptional 62%, which is particularly impressive for a government-owned entity operating in a niche market,” highlighted Bathija.
AgenciesThe company’s price-earnings (PE) ratio of 12.47 is lower than that of its peers, underscoring its leading position in terms of market capitalization.
“The stock is in an uptrend and the momentum is strong. Various indicators align to bolster confidence in the upward trend,” he said.
“The stock is anticipated to continue its upward trajectory towards INR 2500. A sustained break above INR 2505 could propel it towards its all-time high of INR 2900, with a stop loss (SL) set at INR 2080,” recommended Bathija.
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
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