Cochin Shipyard shares are in a downtrend, oversold on charts; can they bounce back?

Shares of Cochin Shipyard are in a downtrend for the last two months. The defence sector stock, which hit a record high of Rs 2977.10 on July 8, 2024 was trading at Rs 1850 today, down 38% during the period. The stock is trading in the oversold zone, indicates its relative strength index (RSI) at 28.8. It means there are more sellers for the stock than buyers in the current trading session.

The stock is also in a major bearish trend as it is trading lower than the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day but higher than the 150 day and 200 day moving averages.

However, in the current session, the stock rose 1.44% to Rs 1846 on BSE. Cochin Shipyard’s market cap climbed to Rs 48,610 crore.

In early deals, Cochin Shipyard stock opened higher at Rs 1849 on BSE. Total 0.22 lakh shares of the firm changed hands amounting to a turnover of Rs 4.13 crore on BSE. 

The multibagger stock has delivered returns of 171% in 2024 and risen 205% in a year.

Laxmikant Shukla, Technical Research Analyst, YES Securities is bearsih on the stock. The resistance for the stock stands at Rs 2,110 and support lies at Rs 1,800 level. 

"The stock continues to exhibit a strong bearish trend, currently trading below its 20,50 and 100 SMAs. This downtrend is further confirmed by momentum indicators and oscillators which highlight the prevailing negative sentiment. Considering these factors, we recommend avoiding this stock for the next few weeks0," said Shukla. 

Market expert Raghvendra Singh told BTTV that the stock is trading in a weak zone. 

Singh said the stock can fall till Rs 1,600. Right now, both the stock and sector look weak. If the sector recovers as a whole, then only Cochin Shipyard can be considered for the portfolio. 

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.