Codan shares hit another all-time high. Can the rally keep going?

Shares in Codan Ltd (ASX: CDA) surged to a fresh all-time high on Friday. This came after the company delivered a standout first-half FY26 trading update.

At one point, Codan shares touched a record $39.20 before easing slightly into the close. Even so, the stock still finished the session up a hefty 16.89% at $36.89.

That move caps off a remarkable run. Codan shares are now up 133% over the past 12 months, making it one of the ASX’s strongest technology performers.

So, what is driving the rally, and is there more upside from here?

Strong first-half numbers impress investors

The catalyst for Friday’s surge was Codan’s FY26 first-half trading update, released before market open.

The company expects group revenue of approximately $394 million for the half, representing growth of around 29% compared to the prior corresponding period. Underlying net profit after tax (NPAT) is expected to be at least $70 million, up roughly 52% year-on-year.

Both operating divisions contributed to the strong result.

The metal detection business delivered revenue of about $168 million, up 46% on the prior period, supported by strong gold detector sales in Africa and solid demand across recreational markets globally.

Meanwhile, the communications segment generated revenue of approximately $222 million, growing 19% year-on-year. Management noted this was at the upper end of its previously stated growth target range.

Overall, the update reinforced investor confidence that Codan is executing well across both divisions.

What the Codan chart is telling us

From a technical standpoint, Codan’s move into uncharted price territory is significant.

The stock has broken above prior resistance around the $33 to $34 level, supported by strong trading volume. That zone now looks like an important area of support if the shares pull back.

Momentum indicators also show how stretched the move has become. Codan’s relative strength index (RSI)is now sitting at 78, which typically signals overbought conditions in the short term. While this does not mean the rally is over, it does increase the risk of near-term consolidation after such a sharp move.

Codan’s beta is sitting around 1.2, indicating the stock tends to be more volatile than the broader market. That higher beta helps explain both the speed of the recent rally and the likelihood of sharper swings along the way.

Can the rally continue?

Any further gains will likely depend on Codan delivering solid margins and cash flow when it reports first-half results on 19 February. That will be the next key test for the stock.

After such a sharp move higher, a period of consolidation or a modest pullback would not be surprising.

The post Codan shares hit another all-time high. Can the rally keep going? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.