RITES, Titagarh: How to trade rail-related stocks ahead of Budget 2020

The overall outlook for the rail-related stocks looks promising.

Thus far in the financial year 2019-20 (FY20), shares of rail-related stocks have given mixed performance at the bourses. RITES, for instance, has outperformed the market by surging around 54 per cent as compared to over 6 per cent rise in the benchmark Nifty50 index. Ircon International has risen around 8 per cent during the period while Titagarh Wagons and Texmaco Rail & Engineering slipped 17 per cent and 42 per cent, respectively.

With the Union Budget around the corner, here's a look at what technical charts signal for these stocks and how you should trade them.  

RITES Ltd (RITES): The "Gap Down" seen in November 2019 were filled with strong volumes suggesting a positive upside. This resulted in a new lifetime high of Rs 328 levels. Although, Relative Strength Index (RSI) is in the overbought condition, still the counter is not showing any major weakness. It trades above 50-day moving average (DMA) located at Rs 288 and broadly, has not broken 100-DMA in the last five months, which is currently at Rs 270 levels as per the daily chart. CLICK HERE FOR THE CHART

Texmaco Rail & Engineering (TEXRAIL): This is the only counter which is showing less strength. Currently,  the stock faces resistance at 100-DMA placed around Rs 42 levels. To climb higher, this counter needs to convincingly close above Rs 42 and with strong volumes. One can watch out for Rs 51 which is its 200-DMA. On the other hand, the support remains at 50-DMA placed at Rs 38 levels. CLICK HERE FOR THE CHART

Titagarh Wagons Ltd (TWL): After nearly a year, the counter managed to successfully trade above 200-DMA. The weekly chart clearly shows a horizontal trend line/ support breakout at Rs 55 levels. The counter has even managed to fill the weekly gap prevailing in the range of Rs 58.55 to Rs 58.45 levels. All this indicates a positive strength in the counter which should result in an upside towards Rs 71, which is 100-weekly moving average (WMA). The weekly Moving Average Convergence Divergence (MACD) has just crossed zero line upward, indicating that the potential for the upside is higher.CLICK HERE FOR THE CHART

Rail Vikas Nigam Ltd (RVNL): On a bigger scale, the counter is trading in a consolidation phase in the range of Rs 27 to Rs 22. The recent upswing from Rs 23 towards Rs 26 indicates a positive momentum and if this continues for a few more sessions, then one can expect a breakout above Rs 27 levels, as per the daily chart.  CLICK HERE FOR THE CHART

Ircon International Ltd (IRCON): The counter has climbed a new lifetime high of Rs 464 few sessions ago. The current levels are witnessing selling pressure; however, this may be capitalised for buying opportunities considering the counter trades above 200-day moving average (DMA) decisively. The Golden Cross of 50-DMA with 200-DMA in November last year and current crossover of 100-DMA with 200-DMA provides sufficient support for an upside towards Rs 500 levels. CLICK HERE FOR THE CHART