Shares of Mazagon Dock Shipbuilders Ltd. have surged by 5% on Tuesday, December 17, continuing their positive momentum after a 4% gain the previous day. This marks the second consecutive day of gains for the stock, reflecting a solid recovery since hitting a low in mid-November.
The stock has now risen 36% from its low of ₹3,851 on November 14, making a strong comeback. Despite the broader market weakness, Mazagon Dock performance stands out. On technical charts, the stock has entered “overbought” territory, with a Relative Strength Index (RSI) reading of 76. An RSI above 70 signals that the stock may be overbought, suggesting a potential for price stabilization or a pullback.
This upward trend follows the stock’s break above its 100-Day Moving Average (DMA) in late November, marking the start of its current rally.
Stock Split Driving Investor Interest
In addition to the price surge, Mazagon Dock is seeing increased investor interest ahead of its stock split. The state-owned shipbuilder has set December 27, 2024, as the record date for the stock split. Shareholders who own shares before this date will be eligible for the split, where one share of ₹10 will be divided into two shares of ₹5 each.
Currently trading at ₹5,280, Mazagon Dock’s stock is just 10% away from its all-time high of ₹5,860, which was reached in August 2024 before a three-month correction phase. The stock has gained 131% so far in 2024, a remarkable performance by any standard.
Limited Free Float Boosts Stock Price Action
Mazagon Dock’s stock is also influenced by its limited free float. The government still holds a dominant 84% stake in the company, reducing the number of shares available for trading in the market. This concentration of ownership could be one of the factors driving the stock’s volatility and subsequent price increases.
With its stock split on the horizon and a strong recovery in its share price, Mazagon Dock Shipbuilders is catching the eye of investors, while its strong technical performance suggests further upside potential.
