Cochin Shipyard Ltd - Rectangle Pattern at Support

1. Pattern Analysis
Cochin Shipyard is currently exhibiting signs of a strong structural setup on the daily timeframe. A broad Rectangle Formation is visible, where price has been oscillating between two key horizontal levels for the past 7 to 8 months. The lower base has consistently provided support near ₹1,200–₹1,250 levels, while the upper boundary near ₹1,700 has acted as a resistance cap for multiple attempts.
The most critical observation is that price had approached the upper resistance zone sharply in the recent sessions, indicating bullish momentum attempting to push through the rectangle's upper wall. The fact that this consolidation spans over multiple quarters makes this a high-quality accumulation pattern. A confirmed breakout above ₹1,700 can initiate a major move towards higher price targets, while failure could lead to retesting of intermediate supports.

2. Volume Analysis
Volume expansion is clearly accompanying the current move towards resistance, which is a very positive technical development. The last few trading sessions saw a significant increase in traded volumes, reaching their highest levels since the consolidation began. High volumes near resistance zones generally indicate the presence of institutional activity and smart money preparing for a breakout.
The surge in volume is not isolated; it is synchronized with bullish price candles, suggesting genuine accumulation. This is critical because a breakout accompanied by volume expansion stands a much higher probability of sustaining than a low-volume breakout. Thus, the volume behavior firmly supports the bullish thesis.

3. Candlestick / Price Analysis
Price action analysis on the daily chart reveals a series of strong bullish candles with wide bodies and minimal upper wicks, showing clear intraday dominance by buyers. However, the most recent candle shows a large volatile move, with some intraday rejection from higher levels, signaling that while bullish momentum exists, sellers are still active near the ₹1,700 zone.
Prior to this, the stock staged a clean higher low structure within the rectangle, rising sharply from the ₹1,300 support area. This strong impulsive move upward, without deep retracements, demonstrates the underlying strength and willingness of buyers to absorb supply. The large volume candles along with higher closes validate this aggressive buyer control.

4. Validation of Signal
The overall technical setup favors a bullish breakout scenario. The combination of a multi-month rectangle pattern nearing completion, supportive volume behavior, and strong price action confirms that the stock is preparing for a potential strong move.
However, the last volatile session highlights the importance of waiting for a proper breakout confirmation. A daily close decisively above ₹1,700 with sustained volumes would validate the bullish signal. In such cases, the breakout would be a high-probability trade setup backed by structure, momentum, and volume. Until then, some cautious optimism is warranted.

5. Tradable Points Determination
Entry Point Determination
The ideal entry would be on a confirmed breakout above ₹1,710 with a strong daily close backed by high volumes. Aggressive traders may pre-emptively initiate positions above ₹1,680 with strict risk management, but conservative positioning post-breakout would be safer.
Target Point Determination
The rectangle's height is approximately ₹500 (₹1,700 resistance minus ₹1,200 support). Adding this height to the breakout zone gives a primary target of ₹2,200.
Target 1: ₹1,900 (psychological round number and minor resistance)
Target 2: ₹2,200 (measured move based on pattern height)
Target 3: ₹2,450–2,500 (extended momentum targets if breakout sustains)
Stop Loss Placement and Trailing SL Follow-up
Initial stop loss should be placed below ₹1,600 or the immediate swing low once breakout happens. A trailing stop-loss strategy can be employed:
Move SL to ₹1,670 after price crosses ₹1,800.
Move SL to ₹1,750 once price crosses ₹2,000.
Keep trailing the SL higher along minor swing lows as price advances.
This dynamic approach ensures that gains are protected while allowing the trader to ride the trend for maximum reward.