SCI: Shipping stock surges 14% in 4 days; here’s why Axis Securities sees more upside

Shares of Shipping Corporation of India (SCI) continued their strong rally on Friday, rising as much as 3.7 per cent to hit a day’s high of Rs 259.50 on the BSE, up from its previous close of Rs 250.20. The counter has surged nearly 14 per cent over the last four sessions alone. At last check, the scrip was trading 2.32 per cent higher at Rs 256.

This momentum follows a technical "Buy" recommendation from brokerage firm Axis Securities. In an "Axis Momentum Picks" note, the firm identified the shipping stock as poised for further gains.

The report set a target range of Rs 275-289, to be achieved within 3-4 weeks. The upper-end target of Rs 289 implies a potential upside of nearly 13 per cent from current levels. The brokerage advised a "Buy range" of Rs 249-244 and placed a "trend reversal" or stop-loss level at Rs 232.

Detailing the technical rationale, Axis Securities noted that SCI "has registered a decisive breakout above the inverted head and shoulders pattern on the weekly chart at Rs 240". The brokerage stated this breakout was "marked by a strong bullish candle, signalling the onset of a medium-term uptrend".

This bullish setup is supported by strong underlying data. Axis said, there has been "a notable surge in volume activity at the breakout", which "validates the pattern and reflects strong market participation".

Furthermore, momentum indicators are reinforcing the positive trend. The weekly Relative Strength Index (RSI) is trending higher, holding firm above the 50 mark. Axis Securities noted this "highlights rising strength and sustained buying interest". The stock has also "closed above the upper weekly Bollinger Band, generating a fresh buy signal".