Defence stock: BDL shares down 39% from 52-week high; technical charts hint at recovery

Defence PSU stock Bharat Dynamics Ltd (BDL) is down 39 per cent from its May 2025 levels. However, technical charts suggest that a recovery may be on the horizon. Systematix Shares and Stocks (India) Ltd advised traders to consider buying BDL in the Rs 1,262-1,258 range, with a stop loss at Rs 1,220, for an upside target of Rs 1,300 per share. The brokerage said the stock also has the potential to extend gains further towards Rs 1,340, based on its technical analysis.

On Tuesday, the scrip traded 1.06 per cent higher at Rs 1,275.40 on BSE. At this level, the stock was down 39.15 per cent from its May 30, 2025 high of Rs 2,096 apiece.

On the daily chart, the BDL stock has formed strong bullish candlestick structures over the pasttwo trading sessions, indicating renewed buying interest from lower levels. Systematix said the price action has respected the long-term trend line support near the Rs 1,232 zone and has repeatedly denied the stock trading below this level, signalling accumulation and strong demand at support.

"From a pattern perspective, the stock has completed a bullish reversal Harmonic setup with a well-defined Potential Reversal Zone placed between Rs 1,231 and Rs 1,222. The recent rebound from this zone reinforces the validity of the harmonic structure and suggests a shift in momentum toward the upside," it said. 

Additionally, Systematix said the RSI-14 is showing a positive divergence, where price made a lower low while
momentum did not confirm the weakness. This divergence typically indicates exhaustion in the downtrend and increases the probability of a near-term recovery, it said.

Defence stocks such as BDL were in focus earlier this month on account of increased allocation towards defence in the Budget 2026.  PL Capital said capex on defence aircraft & aeroengines went up significantly. It noted that the capex has been revised to Rs 72,800 crore for FY26 from Rs 48,600 crore earlier. The capex for defence aircraft & aeroengines is budgeted at Rs 63,700 crore for FY27, which is seen positive for BEL and HAL.