Mazagon Dock shares snap four-day losing streak but analysts are still bearish; here's why

Shares of Mazagon Dock Shipbuilders snapped four day losing streak on Wednesday amid high volatility in the broader markets. Mazagon Dock stock ended marginally higher at Rs 4303.45 today against the previous close of Rs 4293.15 on BSE. However, in the preceding four sessions from today, the multibagger stock fell 5.42% from Rs 4,539.20 on August 21 to Rs 4,293.15 on August 27, 2024.  

The defence stock is still down 26.56% from its record high of Rs 5,859.95 on July 5, 2024.

Despite the ongoing correction, the stock is still up 134.67% in a year and gained 1,116.52% in two years.

In the current session, the market cap of the firm stood at Rs 86,796 crore.

Total 0.99 lakh shares of the firm changed hands amounting to a turnover of Rs 42.63 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 38.7, 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 but 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.

Riyank Arora, technical analyst at Mehta Equities said, “With the current market price at Rs 4,322, the immediate support is at Rs 4,150 and major support is at Rs 4,100. The resistance levels are at Rs 4,450 and Rs 4,500. The stock shows a bearish trend with a negative outlook. A sell on rise strategy is recommended, with potential exits near the Rs 4,450 to Rs 4,500 resistance zone.”

Anshul Jain, Head of Research, Lakshmishree Investment & Securities is bearish on the outlook of the stock.

“Mazagon Dock Shipbuilders Ltd. (Mazhdock) is flashing strong bearish signals, forming a classic bearish flag pattern after slipping below its 20- and 50-day moving averages. The stock is now grappling with a bearish crossover, where rising volumes on down candles and shrinking volumes on up candles signal smart money exiting positions. With all positive triggers exhausted and negative catalysts starting to take hold, retail investors are increasingly trapped at higher levels. The stock looks set for a slide, with an initial downside target of Rs 3,300. Any rally should be viewed as a fleeting opportunity to exit long positions. The technical indicators paint a clear picture: Mazagon Dock is under pressure, and further declines appear imminent,” said Jain.

Manish Shah, independent Market Analyst said, “After witnessing a spectacular rally, Mazagon Dock is currently in a corrective decline. Since July 2024 till date the price of Mazgaon Dock has slowly declined from a high of Rs 5860 to the current levels. The long-term trend is up but the short term trend is down. Eventually, the prices will bottom out and the price will go on to make a new high in the months to come. Traders/investors should slowly accumulate stock on gradual declines. Traders who want to play momentum should consider buying on a breakout above Rs 4930. Once the corrective decline is complete, rally is likely to continue and make a new high above Rs 5860.”