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Shares of Paras Defence and Space Technologies Ltd nudged higher on Friday, before giving up their gains. However, a couple of brokerage firms believe that the aerospace and defense player is headed for a decent rise in the near-term based on its technical charts and rally in the other stocks in the segment.
Shares of Paras Defence rose about a per cent to Rs 799 on Friday, commanding a market capitalization of more than Rs 3,100 crore. However, the stock dropped about 2 per cent from day’s high at Rs 775.70. Analysts see this as the buying range in the counter and suggest to accumulate it on corrections.
Shares of Paras Defence have gained about 80 per cent from its 52-week low at Rs 447.10 hit in March 2023, while the stock is up 35 per cent in the last one year. It has advanced 25 per cent in the last six months period, while it is up 12 per cent in the last one month.
Paras Defence has recently experienced a breakout of an ‘inverted head and shoulders’ pattern, accompanied by significant trading volume. Market expectations are leaning towards further upward movement, with a potential target of Rs 900. On the downside, notable support is observed in the vicinity of Rs 715 as support loss, said Choice Broking.
“Paras Defence is trading above key exponential moving averages (EMAs), including the 20-day, 50- day, 100-day, and 200-day EMAs, indicating robust bullish momentum and suggesting potential for further upward price movement. The Relative Strength Index (RSI) is presently at 62, showing an upward trajectory and indicating increasing buying momentum,” it said.
“Additionally, the stochastic relative strength index exhibits a positive crossover. A prudent strategy would be to consider buying on dips at levels of Rs 750. Overall, considering the technical analysis and current market conditions, Paras Defence presents a promising buying opportunity for those aiming, provided that prudent risk management measures are in place,” it added.
Paras Defence and Space Technologies was listed at the bourses in September 2021, when the company raised a total of Rs 171 crore via its IPO by selling shares for Rs 175 apiece. The scrip turned multibagger on debut as the stock hovered around Rs 500 on its maiden trading session. However, its scaled Rs 1,200-mark post debut.
Anand Rathi Share and Stock Brokers said that Paras Defence and Space Technologies depicts a fresh breakout on the short-term chart. This breakout is from the ‘Ichimoku’ resistance but above Rs 778 there would be another range breakout in the stock, it said.
“We expect a strong momentum in the stock which can take it towards its 52-week high of Rs 848 above Rs 778-levels. Thus, we advise traders to go long in the stock in the range of Rs 755-745 with a stop loss of Rs 696,” added the domestic brokerage.
Paras Defence and Space Technologies are primarily engaged in the designing, developing, manufacturing, and testing of a variety of defence and space engineering products and solutions. The company has five major product category offerings in defence and space optics, defence electronics, heavy engineering, electromagnetic pulse protection solutions and niche technologies.
Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
