India-Iran Chabahar port deal: Time to bet on Indian shipping stocks?

Among shipping stocks - SCI, GE Shipping and Dredging have logged multi-fold returns over the last few years; here's what the chart suggests for the likely trend going ahead.

India and Iran on Monday signed a 10-year long-term bilateral contract for the operation of Chabahar Port, a vital cog in India's trade plans with central Asia and parts of Europe.

Under the agreement – signed between India Port Global Limited (IPGL) and the Ports and Maritime Organization (PMO) of Iran – India will develop the strategic port for 10 years.

Prior to this, India had been operating the port through short-term agreements as the geopolitical nature of the country kept investors and shippers reticent from investing there, citing the lack of the government’s own long-term agreement so far. READ MORE

Reports suggest that the India-Iran Chabahar agreement gives India an opportunity to counter China's growing economic influence in the region, hence is a very critical deal for India.

Against this backdrop here's the technical outlook on the shipping related stocks for the next 12 months.

Shipping Corporation of India (SCI)

Current Price: Rs 209

Upside Potential: 34%

Shipping Corporation of India stock has witnessed a phenomenal run of 1,454 per cent from its low of Rs 18.7 in August 2019 to a record high of Rs 290.70 in February 2024. The price-to-moving averages action is favourable on the long-term chart.

However, a key momentum oscillator, namely the RSI (Relative Strength Index) has given a negative divergence, suggesting likely consolidation in the near-term. As such, SCI stock may consolidate, with near support seen around Rs 190 levels, and far-off support at Rs 150 levels. CLICK HERE FOR THE CHART

On the upside, SCI stock needs to break and trade consistently above Rs 240 levels in order to witness fresh momentum. Post which, the stock may attempt a rally to Rs 260 - Rs 280 range.

GE Shipping

Current Price: Rs 1,048

Downside Risk: 25.5%

Great Eastern Shipping (GE Shipping) stock has rallied 318 per cent in the last three years. The stock is seen trending along its higher-end of the Bollinger Bands on the monthly scale. The long-term chart suggests, that the bias is likely to remain positive as long as the stock holds above the 20-MMA (Monthly Moving Average) at Rs 780. Given the fact, key momentum oscillators have witnessed negative divergence; a corrective move on the GE stock could unfold, before the up trend continues. CLICK HERE FOR THE CHART

Dredging Corporation

Current Price: Rs 769

Upside Potential: 21%

Dredging stock has soared over 100 per cent in the last one year, amid bouts of volatility. The price-to-moving averages action is clearly favourable for the stock, with strong support seen around Rs 700 levels followed by Rs 630. On the upside, the stock can attempt to revisit its peak around Rs 930 levels. CLICK HERE FOR THE CHART