IRCTC, Texrail, RITES: IRFC IPO may spark rally in railway-related stocks

Railway-related stocks such as IRCTC and RITES may see a sharp surge once significant resistances are breached

Indian Railway Finance Corporation's (IRFC's) three-day IPO opened for subscription on Monday with a price band of Rs 25-26 per share. At the upper end of the price band, the firm looks to raise nearly Rs 4,633.4 crore. 

According to analysts, IRFC's attractive valuation, healthy return-ratios, expectations to post strong growth, relatively low risk business model, strategic role in financing growth of Indian Railways, and long term prospects considering electrification and network expansion makes it an attractive long-term bet. READ MORE

Over the past one year, IRCTC has outpeformed the benchmark Nifty50 index by surging 46 per cent on the NSE, as against a 17 per cent rise in the index, ACE Equity data show. Titagarh Wagons and Texmaco Rail, on the other hand, have slipped 0.9 per cent and 17.6 per cent, respectively.

So, are railway-related stocks an attractive investment bet? Here's what charts suggest:

Texmaco Rail & Engineering (TEXRAIL): With a "Golden Cross" formation, the stock is aiming to conquer the breakout level of Rs 37, as per the daily chart. Once this resistance is crossed firmly on a closing basis, the upside may see a rise towards Rs 45 and Rs 50 levels. The current support falls at Rs 31 levels. CLICK HERE FOR THE CHART
 
Titagarh Wagons Ltd (TWL): While taking the support of 50-weekly moving average (WMA) near Rs 41 levels, the stock has managed to conquer 100-WMA. This strength is indicating a rally towards 200-WMA, currently placed at Rs 78 levels, as per the weekly chart. The overall trend is likely to stay bullish as long as the stock holds the positive sentiment above Rs 54 levels. The Moving Average Convergence Divergence (MACD) has formed a positive crossover indicating an upward direction. CLICK HERE FOR THE CHART
 
Rail Vikas Nigam Ltd (RVNL): The recent new all-time high at Rs 35.55 has seen some profit booking with the momentum staying highly bullish. On the downside, if the counter manages to uphold the support of Rs 28 on the closing basis, the upside bias may see a reversal towards Rs 35 and an uncharted territory of Rs 39 levels. CLICK HERE FOR THE CHART
 
Indian Railway Catering and Tourism Corporation (IRCTC): The overall sentiment is trading with a negative bias with a recent gap-down from Rs 1,600 levels. If this resistance of Rs 1,600 is not breached on the upside, the counter may trade with a negative sentiment. On the downside, as long as the support of Rs 1,350 level is held, the stock may attempt to climb the resistance level. CLICK HERE FOR THE CHART
 
RITES Ltd (RITES): A perfect "Golden Cross" formation suggests a positive upside above the breakout zone of Rs 280 levels. That said, the current momentum is slightly weak, yet the upside bias is still intact. The support comes at Rs 253 and Rs 248, which are its 100-DMA and 200-DMA, respectively. The overall trend is moving towards Rs 300 levels. CLICK HERE FOR THE CHART
 
Ircon International Ltd (IRCON): The weekly chart clearly indicates a closing basis resistance of Rs 97 levels. Unless the stock conquers the same, the upside bias may not meet with the expected aggression. Similarly, the Relative Strength Index (RSI) needs to cross 57 value decisively to start a new upward trend. That said, till the stock upholds the support of Rs 84 level, the sentiment may not turn into a bearish outlook. CLICK HERE FOR THE CHART