Multibagger Defence Stock
Shares of Apollo Micro Systems Ltd have rallied 53% in just one month, leaving investors confused whether they should buy, sell or hold this multibagger defense stock. On the previous trading day, the stock hit a record high of Rs 157, up 4.04% from its previous close of Rs 150.90.
However, the stock witnessed some profit booking in the afternoon, falling 4.37% to Rs 144.30. The market cap of the company is now Rs 4416.51 crore.
A total of 10.84 lakh shares were traded, with a turnover of Rs 16.20 crore. The stock has gained 298% in the last two years, and 842% in the last three years, giving impressive multibagger returns.
Aditya Gaggar, Director, Progressive Shares, pointed out that the stock has recently broken out of a “falling wedge” formation, but after such a sharp rise, the upside may be limited in the short term.
Ameya Ranadive, Chartered Market Technician, said Apollo Micro Systems is trading at Rs 145, supported by a breakout after a one-year consolidation period. The stock is also trading above key moving averages, which indicates strong bullish momentum.
The Relative Strength Index (RSI) of 67 indicates strength, while the Average Directional Index (ADX) supports trend sustainability.
From a fundamental perspective, Apollo Micro Systems is seeing growth in its order book, with the company moving several programs from development to production, which improves revenue visibility.
The company’s active participation in Make-II defense projects and potential collaborations with large platforms in the defense sector also present promising opportunities.
Given the technical and fundamental strength, Ranadive recommends Apollo Micro as a good buy-on-dips candidate with a medium-term target price of Rs 175-186. However, he cautions that a drop below Rs 120 will negate the positive outlook.
Independent analyst A.R. Ramachandran points out that the stock is facing strong resistance at Rs 157. If it breaks below the support level of Rs 141, it could fall to Rs 118 in the near term. The stock has a one-year beta of 1, which indicates average volatility over this period.
Apollo Micro Systems’ RSI is at 74.1, which indicates that it is neither in the overbought nor oversold zone. The stock is currently trading above its 5-day, 10-day, 20-day, 30-day, 50-day, 100-day, 150-day and 200-day moving averages.
Apollo Micro Systems primarily focuses on providing electronics and electromechanical systems for missile, avionic, shipborne and submarine systems as well as design, research and development for defense applications.
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