RVNL, Rites, IRCTC: Rail-related stocks on fast track, can rally up to 16%

So far in 2022, Titagarh Wagons and Rail Vikas Nigam have zoomed 87 per cent and 80 per cent, respectively. Texmaco Rail and Rites too logged smart gains. IRCTC is the sole underperformer.

Shares of raliway-related stocks have witnessed a fabulous rally in recent trading sessions. Overall so far this calendar year, Titagarh Wagons and Rail Vikas Nigam were the top performers, up 87 per cent and 80 per cent, respectively. Texmaco Rail & Engineering surged 56 per cent, while Rites and Ircon International gained 43 per cent and 25 per cent, respectively.

Meanwhile, Indian Railway Catering and Tourism Corporation (IRCTC) was the only stock to have underperformed, down 10 per cent on a YTD basis.

The significant rally in railway stocks commenced in late August with select counters observing a significant jump in volume based buying. Specifically, Rail Vikas Nigam saw rise in daily volumes with the counter clocking the highest volume since November 2021. Likewise, RITES too experienced sharp spike daily volumes rise, a trend last seen in July 2020.
 

Shares of Texmaco Rail & Engineering and Ircon International might not have gained on volume structure, but have greatly rallied on price strength and momentum. 

On Wednesday, Texmaco Rail & Engineering was up 9 per cent, Ircon International jumped 3.7 per cent, Rail Vikas Nigam added 3.2 per cent.

Going ahead, here’s the technical outlook to gauge the possible next move:-

Rites Ltd (RITES) 

Likely target: Rs 400 and Rs 420

Upside potential:  7% to 12%

Despite a negative divergence on the daily chart, shares of Rites shares continue to hold ground over the recent pull back mark of Rs 360. The next support that has bolstered the positive bias falls at Rs 340. Thus, unless the stock breaks both these supports, the positive trend is expected to see a bullish reversal towards Rs 400 and Rs 420. CLICK HERE FOR THE CHART

Ircon International Ltd (IRCON)

Likely target: Rs 65

Upside potential:  16%

Ircon International shares surpassed the vital hurdle range of Rs 52 to Rs 54, which the stock had failed to cross since early 2020. The up move is supported with robust volume, thus underlining the strength on the upside. With the present momentum the stock seems headed to Rs 65 from a medium-term perspective. Immediate support for the stock exists at Rs 50 mark. CLICK HERE FOR THE CHART

Indian Railway Catering and Tourism Corporation (IRCTC)  

Outlook: Golden Cross breakout points a positive bias.

There is a “Golden Cross” breakout on the daily chart, which suggests a positive bias for the coming sessions. The present chart structure depicts lower price strength relative to the breakout structure, but the stock is not letting selling pressure dominate it. The immediate support for the stock is seen at Rs 725 level followed by Rs 710, which are the 50-day moving average (DMA) and 200-DMA, respectively. CLICK HERE FOR THE CHART

Rail Vikas Nigam Ltd (RVNL) 

Likely target: Rs 70

Upside potential:  11%

The “Higher High, Higher Low” formation has propelled stock to scale uncharted territory. The trend is robust with momentum staying firmly afloat. Technically, the stock is headed to Rs 70 with immediate support staying at Rs 55 mark. The stock is buoyant in the overbought category of the Relative Strength Index (RSI), suggesting price strength is overpowering the selling pressure.  CLICK HERE FOR THE CHART

Texmaco Rail & Engineering (TEXRAIL)

Outlook: Hurdle at Rs 60

Shares of Texmaco Rail & Engineering seem to be headed towards the hurdle of Rs 60; in case the stock crosses the hurdle, it could breakout on the upside. Immediate support for the stock comes at Rs 52 followed by Rs 50. A robust breakout above 60 could see the stock rally towards Rs 68. CLICK HERE FOR THE CHART