Two ASX-listed defence stocks are under pressure on Tuesday, with both giving back recent gains after a strong run over the past year.
Shares in Droneshield Ltd (ASX: DRO) and Electro Optic Systems Holdings Ltd (ASX: EOS) are both trading lower at the time of writing. This weakness comes despite no major company-specific announcements.
Here's what appears to be driving the move.
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Droneshield share price pulls back
The Droneshield share price is down 6.27% to $3.59.
This follows a strong rally over the past year, with the stock still up around 240% over 12 months. However, its short-term performance shows more volatility, with shares down 12.86% over the past week.
From a technical view, the recent pullback comes after a period of strong momentum that pushed the stock towards the upper end of its bollinger band range in recent months.
The relative strength index (RSI) is currently around 46, suggesting momentum has cooled and is closer to neutral levels. This indicates buying pressure has eased following the earlier run-up.
The chart also shows a pattern of lower highs forming since late 2025, which can point to a loss of upward momentum in the near term.
There have been no fresh announcements from the company today, suggesting the move is being driven by broader market activity.
EOS share price also under pressure
EOS shares are down a sizeable 8.84% to $8.15.
Like Droneshield, EOS has delivered strong longer-term gains, with the stock up more than 480% over the past 12 months. However, the recent trend has turned more negative, with shares falling roughly 23.97% over the past week.
Looking at the technicals, EOS has moved lower after failing to hold recent highs near $11.80 earlier this month.
The stock is now trading closer to the middle of its bollinger band range, with the lower band sitting well below current levels. This suggests there is still room for further movement in either direction.
RSI is currently around 43, indicating weakening momentum and reduced buying strength.
The pullback follows a sharp rally driven by increased demand for defence and counter-drone technology, which had pushed valuations higher in a short period.
What's behind the weakness?
The declines in both stocks appear to be linked to a broader market pullback, alongside profit-taking following strong recent gains.
Both companies have been among the strongest performers on the ASX over the past year, supported by rising global defence spending and increased focus on drone and counter-drone capabilities.
In both cases, technical indicators show momentum has eased, with prices moving away from recent highs and RSI levels trending lower.
In addition, the absence of new announcements also indicates the moves are being driven by overall market conditions.
