AVIC Chengdu share price: Shares of the Chinese defence company, AVIC Chengdu, which manufactures fighter jets like the J-10, have failed to see any traction this year despite the , having lost 27% so far this year.
The correction comes after a stellar rally in the stock over the past year, fuelled by heightened interest in Chinese military hardware and the J-10 fighter jet. The stock has lost 22% in three months and 28% in the last one year. However, on a longer time frame, it has delivered multibagger gains of 288% in five years.
AVIC Chengdu had become one of the biggest beneficiaries of geopolitical tensions last year. The stock surged after the brought global attention to the J-10 fighter jet. In just two months of the last year (May and June) of the Indo-Pakistan tensions, the Chinese defence stock rallied almost 45%.
Pakistan had claimed it had used Chinese-made J-10C fighter jets in its conflict with India last year.
However, a latest article in Bloomberg by Juliana Liu, suggested that while China ranks in the top five of global military-equipment sellers, China itself hasn’t fought a major war in nearly half a century, so its weapons are largely untested in contemporary warfare.
Additionally, all eyes are on how much tangible support Beijing may be offering Iran, a strategic partner, during the ongoing conflict with the US and Israel. There is no evidence of Chinese arms being deployed directly, which has failed to prop up the shares of AVIC Chengdu Aircraft.
Moreover, the ceasefire agreement between the US and Iran has assuaged fears of the conflict spreading to the rest of the region. Initially, the Chinese defence stocks, including AVIC Chengdu, had gained from the growing hostilities in the Middle East. As ceasefire expectations and de-escalation signals emerged, markets began unwinding those bets.
AVIC Chengdu share price outlook
AVIC Chengdu share is displaying continued technical weakness after rejecting the falling 10-, 20-, and 50-week moving averages on the weekly charts, said Anshul Jain, Head of Research at Lakshmishree.
“The inability to reclaim these key trend indicators highlights persistent overhead supply and confirms that bears remain in control of the broader structure. Each recovery attempt is being met with selling pressure, suggesting the stock is still trapped in a corrective trend rather than building a sustainable base,” he added.
The negatively sloping moving averages continue to act as dynamic resistance, reinforcing downside momentum, he said. “Unless the stock can decisively reclaim these levels, the current trajectory points toward a move to the 45 zone. Any bounce toward the moving average cluster is likely to attract fresh selling interest.”
Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.