The Nifty50 has slipped from the 25,400 levels to around 24,600 with seven consecutive negative candles. While the market pullback can be unnerving for traders, history shows that market dips often present opportunities for selective trading. One such sector is the Defence sector.
Even during recent market volatility, the Defence sector has shown a bullish trend. The sector’s fundamentals and strategic initiatives suggest that this strength may continue despite broader market weakness. For traders and investors seeking potential opportunities in the current market dip, two stocks stand out: Hindustan Aeronautics Limited (HAL) and Bharat Electronics Limited (BEL).
Here are two defence stocks that may be potentially headed north.
Hindustan Aeronautics Limited (HAL)
HAL has been under scrutiny for investors seeking mid-to-long-term potential in the defence sector. The stock declined from Rs. 5,147 to Rs. 4,310 during the recent correction, creating an attractive entry point for patient investors. What makes HAL particularly interesting is the consolidation pattern it has formed between Rs. 4,300 and Rs. 4,600 from July to September 2025.
Source: Tradingview
This rectangle formation indicates that the stock is building a base, a phase often seen as a “dull moment” for short-term traders but a golden opportunity for smart investors.
During such basing phases, the stock typically oscillates in a range while absorption takes place. The key here is that accumulation is happening quietly, without sudden spikes, setting the stage for a future breakout.
A breakout from this rectangle pattern to the upside is a classic signal that the stock has completed its consolidation and is ready to resume its upward journey.
Traders and investors can watch for a potential retest of the breakout level at 4,650-4,700, which may be an ideal entry zone. With the base formed and the breakout confirmed, HAL’s trend appears bullish, providing an opportunity for those looking to capitalise on the Defence sector’s long-term growth story.
Bharat Electronics Limited (BEL)
BEL has also been on an impressive run in 2025, rallying from Rs. 239 in February to Rs. 435 by July. This sharp move attracted attention from investors and traders alike. As is natural in any strong rally, the stock has recently retraced to Rs. 361, a level that coincides with the 38.20% Fibonacci retracement. In technical analysis, this is considered a shallow retracement, often indicative of a strong underlying trend.
Source: Tradingview
The key observation here is the pattern of price action following the retracement. The stock has started forming higher lows, signalling the end of the short-term lower high-lower low sequence.
Combined with a breakout from the horizontal trendline and subsequent retest, this pattern suggests that the bulls are firmly back in control.
For traders and investors, this setup in BEL provides a classic trend resumption opportunity. Buying during the trend resumption phase, especially after a shallow Fibonacci retracement, is a strategy often favoured by those looking to ride the continuation of a bullish trend. The stock’s fundamental support, along with technical signals, makes it a compelling candidate in the Defence sector.
Summing Up An Opportunity
HAL and BEL are two defence stocks that, based on both technical patterns and sector fundamentals, appear well-positioned to benefit from the ongoing bullish trend in the Defence sector.
Accumulating during consolidation phases and watching for breakout confirmations can help minimise risks while enhancing the potential for gains. While the broader market remains uncertain, Defence stocks like HAL and BEL offer opportunities even in challenging conditions.
Disclaimer:
Note: The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.
Kiran Jani has over 15 years of experience as a trader and technical analyst in India’s financial markets. He is a well-known face on the business channels as Market Experts and has worked with Asit C Mehta, Kotak Commodities, and Axis Securities. Presently, he is Head of the Technical and Derivative Research Desk at Jainam Broking Limited.
Disclosure: The writer and his dependents do not hold the stocks discussed here. However, clients of Jainam Broking Limited may or may not own these securities.
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