Mazagon Dock shares are down 26% from record high, right time to buy?

Shares of Mazagon Dock Shipbuilders have fallen 26% from their record high in the nearly two months. The fall in the defence stock comes amid brokerages such as ICICI Securities and Nirmal Bang finding the multibagger stock expensive and projecting a correction in the scrip. The stock has corrected despite the firm reporting a stellar set of earnings for the June 2024 quarter. Mazagon Dock shares, which rose to a record high of Rs 5859.95 on July 5, 2024 was trading at Rs 4,344 in the current session, down 25.87% on BSE. Despite the fall, the stock is still up 133% in a year and gained 1,114.60% in two years.

The multibagger stock, which closed at Rs 4,307.55 on August 26 was trading at Rs 4299.75 at 10:52 am in the current session. It hit an intraday high of Rs 4,367.95 today with the market cap of the firm at Rs 86,721 crore.

Total 0.73 lakh shares of the firm changed hands amounting to a turnover of Rs 31.70 crore. Mazagon Dock shares have a one-year beta of 1.3, indicating very high volatility during the period. 

In terms of technicals, the relative strength index (RSI) of Mazagon Dock stands at 39, signaling it's trading neither in the overbought nor in the oversold zone. 

Mazagon Dock shares are trading lower than the 5 day, 10 day, 20 day, 30 day, 50 day and higher than the 100 day, 150 day and 200 day moving averages.

 Here’s a look at what analysts said on the outlook of the stock.

Aditya Gaggar, Director of Progressive Shares said, “After a spectacular rally (made a high of Rs 5860 in July); the counter has witnessed correction and virtually completed all the movements to be considered as a valid advanced harmonic pattern known as the Bullish Bat Pattern. As per the pattern, the price targets are Rs 4760 and Rs 5180.”

Gaurav Bissa, VP, InCred Equities said, "Mazagon Dock has been trading in a strong continuation pattern on the weekly charts with consistent formation of higher highs and higher lows. The corrections in the last couple of years have been shallow, followed by a robust upside. It has been underperforming its peers as well as broader market indices for the last couple of months and has touched 38 percent Fibonacci retracement of the rise started in March 2024. It is also trading below the median line of a multiyear ascending channel pattern implying it may witness some more pressure in the near term. Existing investors can hold on their positions as the overall trend remains very strong whereas fresh buying is advised around Rs 4,050 levels which is where the 21 exponential moving averages is placed on the weekly charts."

Hashim Yacoobali, Director of South Gujarat Shares And Sharebrokers said, "After witnessing a sharp rally from Rs 1795 to Rs 5830, the stock witnessed supply pressure at higher levels. After four consecutive months, the stock managed to break previous month's  low while on weekly charts, the stock is unable to cross previous week high which suggests the stock is witnessing time correction.

On daily charts, the stock managed to break short-term moving averages also and medium term moving averages located at Rs 3,777. We expect time correction likely to end for Mazagon Dock in the range of Rs 3777 – Rs 3234. Long and medium term investors can look forward to a long opportunity in the range of Rs 3777 – Rs 3234 zone.