Mazagon Dock Shipyard rises 140% against brokerage’s 66% correction call

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Investors rue false brokerage sell call on Mazagon while it rises 140%

By S Jha

New Delhi, July 11: Investors are swearing at a brokerage house for giving a sell call on Mazagon Dock Shipyard, triggering a panic reaction. The news reports on the basis of the brokerage call turned into click baits.

On June 5, Mint reported the report of ICICI Securities, which claimed that the share prices of Mazagon Dock Shipyard are headed for major correction. The business portal attributed the brokerage report giving a sell call with correction up to 66 per cent in the share prices of Mazagon Dock Shipyard.

Reports said that ICICI Securities gave the sell call on Mazagon Dock Shipyard shares on June 4. The share price of Mazagon Dock Shipyard was trading at ₹2798 on June 4.

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The stock market had sharply tanked on June 4 after the Lok Sabha election results. A few days before the Lok Sabha poll verdict, Mazagon Dock Shipyard had given a major breakout.

The share price of Mazagon Dock Shipyard had been trading in the range of ₹2100-2300 for past several months. The stock market had also gone on a tailspin on June 5, a day after the poll verdict.

But the market volatility had subsided by the midsession on June 5. Investors returned to the street by the midsession on June 5 to trigger a sharp rebound in the indices.

After the rebound on June 5, there had been no looking back for the share price of Mazagon Dock Shipyard. In the next one month, Mazagon Dock Shipyard defied gravity to blast off the roof.

The share price of Mazagon Dock Shipyard on Thursday closed at ₹5710. Since the sell call of the brokerage house, the share price of Mazagon Dock Shipyard has risen by almost 140 per cent.

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Since the sell call was attributed to ICICI Securities, several of the shareholders dumped Mazagon Dock Shipyard from their portfolios. Others who were watching for buying deferred the decision.

“I was thinking to buy shares of Mazagon Dock Shipyard on June 5. But someone shared the news link of the brokerage call on WhatsApp. I didn’t have the courage then to buy the shares of Mazagon Dock Shipyard,” said a long-term investor.

Another investor wondered, shouldn’t the analyst with the brokerage house be held accountable for his utterly false sell call on Mazagon Dock Shipyard. The analyst at the brokerage had based argument on premise that Mazagon Dock Shipyard share price has full priced all existing order book, which will take years for execution.

CNBC has quoted chartist Ravi Singh, saying that Mazagon Dock Shipyard is headed for much higher level. He advised the investors to accumulate shares of defence giant as long as it remains above ₹4000.

Disclaimer. This article makes no recommendation for buy or sell of shares of any company.

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