BDL, Bharat Forge: How to trade defence related stocks? Get tech view here

Technical charts suggest defence related stocks can rally up to 21 per cent from present levels; watch out for these key levels.

India's defence and aerospace equipment exports touched a record high of Rs 21,083 crore (about $2.63 billion) in the financial year 2023-24 (FY24), up 32.5 per cent when compared with Rs 15,920 crore in FY23.

These numbers indicate that the defence exports have grown by 31 times in the last decade.

“The defence industry, including the private sector and defence public sector undertakings (DPSUs), have made tremendous efforts in achieving the highest-ever defence exports. The private sector and the DPSUs have contributed about 60 per cent and 40 per cent, respectively,” stated a ministry of defence (MoD) release. READ MORE

That apart, the government proposed to increase defence budget by 4.7 per cent to Rs 6.21 lakh crore for FY25 as against Rs 5.93 lakh crore for FY24.

Against this background, here's a technical outlook on select defence related stocks.

Bharat Dynamics

Current Price: Rs 1,720

Upside Potential: 10.5%

Support: Rs 1,640

Bharat Dynamics has consolidated in a broad range of Rs 1,600 - Rs 1,900 since the start of the calendar year 2024. In the process, the stock has consistently found support around its 20-WMA (Weekly Moving Average), which presently stands at Rs 1,640. CLICK HERE FOR THE CHART

Chart suggest that as long as the stock manages to sustain above its 20-WMA, the stock can attempt a pullback towards the anticipated higher-end of the trading band at Rs 1,900 levels - thus indicating a potential upside of up to 10.5 per cent.

Bharat Forge

Current Price: Rs 1,140

Upside Potential: 13.2%

Support: Rs 1,095

Resistance: Rs 1,185

Bharat Forge has rallied as much as 80 per cent from May 2023 - February 2024 as the stock hit a high of Rs 1,327. Post which, the stock witnessed a quick 20 per cent correction in just two weeks and thereafter is seen consolidating with consistent support around its super trend line on the weekly scale. CLICK HERE FOR THE CHART

Key momentum oscillators have now turned favourable for the stock on the daily chart. Thus, the bias is expected to remain positive as long as the support at Rs 1,095 is held. On the upside, the stock faces near resistance around its 20-WMA at Rs 1,185, above which a rally to Rs 1,290 levels seems likely.

ideaForge Technology

Current Price: Rs 732

Upside Potential: 16.8%

Support: Rs 715; Rs 680

Resistance: Rs 763

ideaForge after its bumper listing (up 93 per cent from the issue price) in July 2023 witnessed a steady fall in the following 7 months and reached near-about the issue price in doing so. Over the last one-and-half month, the stock seems to be consistently finding support around Rs 680 levels. CLICK HERE FOR THE CHART

Further, key momentum oscillators on the daily scale have clearly turned positive. The stock is expected to find near support around Rs 715. On the upside, sustained trade above Rs 763 (20-WMA) can trigger a rally towards Rs 855.

Paras Defence and Space

Current Price: Rs 655

Upside Potential: 9.9%

Support: Rs 625

Resistance: Rs 685

Paras Defence and Space had plunged 27 per cent from its February high of Rs 838 to a low of Rs 610 last week. This week, the stock has pulled back from oversold levels and showing signs of some stability. CLICK HERE FOR THE CHART

Going ahead, the support at Rs 625 holds the key. As long as this is held, the stock can potentially stage a recovery towards Rs 720 levels, wherein the 20-WMA stands and also coincides with the 50 retracement level of its recent fall. In the interim, resistance is expected around Rs 685 levels.

MTAR Technologies

Current Price: Rs 1,897

Upside Potential: 21%

Support: Rs 1,800; Rs 1,660

Resistance: Rs 2,140

MTAR Technologies tumbled 43 per cent from its high of Rs 2,920 in September 2023 to a low of Rs 1,661 in March 2024. The stock has started this month on a positive note, with key momentum oscillators turning favourable both on the daily and weekly scale. 

Going ahead, the stock is expected to trade with a positive bias with the recent low expected to act as support. On the upside, a 38.2 per cent retracement of its recent fall suggests an upside target of Rs 2,140 for the stock, whereas 50 per cent retracement can take the stock to Rs 2,300 levels. Near support for the stock can be expected around Rs 1,800. CLICK HERE FOR THE CHART