Systematix Shares and Stocks (India) Limited on Thursday said traders can buy defence stock Cochin Shipyard Ltd in the range of Rs 1,500-Rs 1,495 apiece, with stop loss at Rs 1,440, for targets of Rs 1,560 and Rs 1,620, respectively, in the short term.

Cochin Shipyard had formed a large bullish candlestick pattern on the daily timeframe on Wednesday, closing 4.79 per cent, reflecting strong participation from buyers. Systematix  said the positive move was further validated by above-average trading volumes, indicating accumulation at current levels and reinforcing the strength of the uptrend. 

"From a trend perspective, the stock has successfully moved above its 20-day and 100-day Simple Moving Averages, signalling a shift in the short- to mid-term trend towards a bullish phase. Additionally, it has sustained above its 20-week moving average, which further strengthens the broader positive structure and suggests strong support on declines," Systematix said.

The domestic brokerage said the stock has confirmed a bullish breakout above the Rs 1,480 level on the hourly chart, indicating continuation of upward momentum on the lower timeframe. This breakout, it said, aligns well with the overall trend and adds confidence to the bullish outlook. 

"Momentum indicators also support the positive bias. The Average Directional Index (ADX) has generated a fresh buy signal on the daily chart, suggesting strengthening trend intensity. At the same time, the Relative Strength Index (RSI) has given a buy signal along with a positive divergence, indicating improving momentum and accumulation at lower levels," Systematix said. 

"Consider this bullish setup as a buying opportunity, with accumulation recommended in the Rs 1,500–1,495 range. A strict stop loss should be maintained at Rs 1,440 to manage downside risk, while potential upside targets are placed at Rs 1,560 and Rs 1,620 levels in the near term," Systematix said.

Cochin Shipyard shares were trading flattish at Rs 1,499.70 apiece on Thursday. Systematix's Rs 1,620 target suggests 8 per cent potential upside on the defence stock in the short term.