HAL, Mazagon Dock: Defence stocks may see up to 10% upside on robust charts

Defence related stocks continue to trade in overbought territory, as momentum sees elevated sentiment.

Shares of Mazagoan Dock Shipbuilders, a premier war-shipbuilding yard producing warships for the Indian navy, sets a new all-time high on Wednesday. The stock has doubled so far in the current year. 

Similarly, Hindustan Aeronautics has surged 52 per cent, while Bharat Dynamics and Bharat Electronics soared 30 per cent in this year, respectively.

Here’s the technical outlook for these defence related stocks:-

Hindustan Aeronautics Ltd (HAL)

Likely target: Rs 4,300

Upside potential: 10%

Post unearthing accumulation closer to Rs 3,600-mark, Hindustan Aeronautics shares displayed a strong reversal that could reach a new historic peak, as per the current chart formation on the daily set-up.

The trend forecasts a positive rally towards Rs 4,300-level from a medium-term perspective. The recent sessions retaining gap-up closes provide the confirmation of a bull run, which is well backed by market participants.  CLICK HERE FOR THE CHART

Bharat Dynamics Ltd (BDL)  

Likely target: Rs 1,350

Upside potential: 10%

Shares of Bharat Dynamics set a new all-time high, triggering next upside in the counter. Technically, the underlying strength has seen positive accumulation in the range of Rs 1,100 to Rs 1,050 levels, which is expected to bolster any buying momentum.

The momentum indicator, Moving Average Convergence Divergence (MACD), has taken a reversal right before breaching the zero line downward, displaying an attempt to regain losing momentum. The stock is headed in the direction of Rs 1,350-mark. CLICK HERE FOR THE CHART

Bharat Electronics Ltd (BEL)

Likely target: Rs 140

Upside potential: 10%

Until the support of Rs 115 is guarded, the likely breakout to emerge over Rs 127 shall see a sharp move in the direction of Rs 140, as per the daily chart. 

The current volume scenario is mixed, with breakout likely to see supportive volumes. As per the candlestick patterns, engulfing previous negative closes have assisted in eyeing a bigger upside in the coming sessions.  CLICK HERE FOR THE CHART

Mazagoan Dock Shipbuilders Ltd (MAZDOCK)

Likely target: Rs 1,800

Upside potential: 9%

Mazagoan Dock Shipbuilders locked in a 10 per cent upper circuit on Tuesday and continues to see higher interest from market participants. So far this year, the stock has doubled gaining over 110 per cent . The momentum facilitates the positive sentiment towards the stock, with a minor breakout of “Ascending Triangle” in the daily time frame. 

Despite trading in the overbought category of the Relative Strength Index (RSI), the price action is preventing any selling pressure to dominate. The immediate support for the current trend emerges at Rs 1,400 and Rs 1,300 levels, with price advancing towards Rs 1,725 and Rs 1800. CLICK HERE FOR THE CHART