Cochin Shipyard shares fall after five sessions, still overbought on charts; here's what analysts say

Shares of Cochin Shipyard snapped their five-day gaining streak on Monday. The defence stock slipped over 4% on BSE against the previous close of Rs 2392.60. The multibagger stock gained 23% in the last five trading sessions. Despite trading in the red, the multibagger stock is overbought on charts, indicates its Relative strength index (RSI). The RSI stands at 79.2. A RSI above 70 signals the stock has more buyers than  sellers in the market. 

In the current session, the defence sector stock fell 4.24% to Rs 2290.95 on BSE. Cochin Shipyard’s market cap slipped to Rs 60,534 crore. 

The stock is amid a major bullish trend as it is trading higher than the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages.

Total 8.11 lakh shares of the firm changed hands amounting to a turnover of Rs 188.32 crore in the afternoon session on BSE. 

The multibagger stock has risen 753% in two years and risen 1338% in three years.

Amol Athawale, VP-technical Research, Kotak Securities said, "After a promising uptrend rally, the stock is currently witnessing profit booking at higher levels. However, the short -term outlook remains positive. Technically, on daily charts, the stock is forming a series of higher highs and higher lows and is comfortably trading above short-term averages, which is largely positive. For traders now, buying on dips and selling on rallies would be the ideal strategy. In the near future, 2,245 and 2,150 would serve as key support zones, while the 2,500–2,550 range could act as key resistance levels for the bulls. However, if the price drops below 2,150, the uptrend could become vulnerable. Below this level, traders may prefer to exit their long positions."

Gaurav Bissa, VP - InCred Equities said, "Cochin Shipyard witnessed a strong upside in the last few weeks. During this, a strong volume participation was seen which kept the momentum strong. However, it has witnessed bearish divergence in RSI which has resulted in some profit booking. one can buy around Rs 2200 for a target of Rs 2600 levels."

Sudhansu Sekhar Panda, Founder of Bluemoon Research & Financial Services said, "The stock has moved from a low of Rs 1200 to Rs 2600. Now, we are observing profit booking as the stock has rallied in the recent past. We think the stock will now trade between a range of Rs 1900 to  Rs 2600. If the stock sustains above  Rs 2600, then more upside may move towards its all-time high of Rs 3000 or above. If it sustains below Rs 1900, then Rs 1700 target is possible."

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.