Shipping stocks: Mazagon Dock Shipbuilders, Shipping Corporation among three other stocks hit 52-week high; here’s why

Shipping stocks have been in focus this week following mulitple news developments. Five shipping stocks recorded fresh 52-week highs on Friday's session, continuing their upward trend. Mazagon Dock Shipbuilders share price rose 5.6%, Shipping Corporation of India share price surged 13%, Dredging Corporation Of India share price jumped 5.2%, Cochin Shipyard share price rose 9.8%, and Garden Reach Shipbuilders & Engineers share price surged 7.4% on BSE.

The shipping stocks have been on a bull run on the strength of order wins, the Baltic Dry Index reaching over one-month highs on advances across vessel sectors, and most crucially, getting government approval for long-pending biggest order worth ₹19,000 crore for shipping companies.

The government has approved projects worth ₹19,000 crore for shipping companies in which five fleet support ships will be produced and one fleet support ship will be delivered in four years, according to a Zee Business research news article.

Mazagon Dock Shipbuilders share price was trading in green for the last two consecutive session after the company signed a master ship repair deal with the US agreement.

"This is to inform that the company has signed Master Ship Repair Agreement (MSRA) with the US Government represented by NAVSUP Fleet Logistics Center (FLC) Yokosuka. This is a Non-Financial Agreement. There are only two shipyards in the country including Mazagon Dock Shipbuilders who have signed MSRA. The agreement is expected to open-up voyage repairs of US Navy Ships at the company, " the company said in an exchange filing.

On the technical front, Mazagon Dock Shipbuilders stock price rose 456.2% and outperformed its sector by 395.1% in the past year, as per trendlyne data.

Further, brokerage firm Kotak Institutional Equities has downgraded Cochin Shipyard stock to a 'sell' from a 'buy' but raised the target price to ₹990 from ₹740 earlier as it indicated the current market price of the stock factors in most of the key positives.

Cochin Shipyard share price surged almost 10 per cent in morning trade on Friday to hit their fresh all-time high of ₹1,258 on BSE. The stock opened at ₹1,195 against the previous close of ₹1,146.15 and jumped 9.8 per cent to its fresh peak.

Also Read: Cochin Shipyard share price turns multibagger in one year, but Kotak downgrades the stock to sell; here's why

Technical Views

Kapil Shah, Technical Analyst, Emkay Global and Technical Trainer, Finlearn Academy, said that in this week, shipping stocks has a great move. Lead was taken by Cochin Shipyard with gain of 34%, Shipping Corporation of India up by 20%, Mazagon Dock Shipbuilders gained 20% and Garden Reach Shipbuilders & Engineers and Dredging Corporation Of India gained by 9% and 3% respectively.

Looking on case to case basis. Cochin Shipyard is trading at all time high level. Price movement is stretched but no reversal sign observed. Stock will remain in bullish phase as far as sustain above 950 level, according to Shah.

Further Kapil explained that Shipping Corporation of India stock is at its previous high which formed in year 2008 and 2010 at 164 level. Technically, stock is at resistance level but no selling pressure has been observed. Moving above 164 level can be considered as fresh breakout. Stock will be in bullish zone above 118 level.

Mazagon Dock Shipbuilders, stock according to Shah, is at all time high level but mild selling pressure has been observed from the top. Stock has immediate support in the range of 1,980 to 1,900 level.

According to Shah, Garden Reach Shipbuilders & Engineers has also witnessed mild selling pressure from all time high level but overall structure remains strong. Stock has immediate support in the range of 840 to 810 level.

Dredging Corporation Of India stock, as per Kapil's views, has underperformed in compare to stocks in list. But it has given a breakout from hurdle of 450 which is positive development. From broader perspective, Stock has immediate resistance at 630 level.