Trading strategies in IRCTC, other rail-related stocks amid stake sale buzz

IRCTC has consistently faced resistance around the Rs 800-mark; break below Rs 660 can further weaken the stock, chart indicates.

Shares of Indian Railway Catering and Tourism Corporation (IRCTC) on Wednesday plunged 5 per cent in intra-day trades after the Government of India decided to trim 5 per cent stake via an Offer for Sale (OFS) route.  The floor price was set at Rs 680 per share. The total issue size stood 40 million equity shares, and the OFS will be open on 15 and 16 December. READ MORE

So far in the year 2022, IRCTC has underperformed the broader market by falling 15 per cent compared to over 7 per cent gain on the benchmark indices. 

Technically, only an up move above the Rs 800 hurdle can lead to a bullish breakout, which the stock has been unable to overcome since May this year, shows the daily chart. While the stock trades 25 per cent higher from the 52-week low of Rs 555.90, the momentum has not been quite robust in battling selling pressure emerging at higher levels, especially closer to the hurdle of Rs 800-mark.

Furthermore, there is a negative divergence of the Relative Strength Index (RSI) and the price action can deteriorate further if the stock loses cushion of Rs 660 mark. Any breach of this support would mean bears are getting aggressive, with the negative strength engulfing stock in the bear territory. CLICK HERE FOR THE CHART

Among other rail relates shares, except for Titagarh Wagons which gained 1 per cent on Wednesday, other listed players mirrored a negative trend. Shares Ircon International, Rail Vikas Nigam, and Rites fell in the range of 2.30 per cent to 1.50 per cent each.

Shares of Titagarh Wagons hit a record peak of Rs 213.95 in the early December, indicating a robust trend with sentiment continuing to stay buoyant. The stock has a support around Rs 195 and Rs 180 levels, which if broken only on a closing basis, could result in a bearish trend. Overall the present bias indicates that the stock is likely to head to Rs 225 level. CLICK HERE FOR THE CHART

Ircon International shares have delivered 47 per cent gains so far in the calendar year 2022. Now, with the vertical rally in the past two months, the stock is determinedly rallying higher in uncharted territories. Immediate obstacle for the stock could be seen at Rs 80, as per the technical chart. The medium-term outlook shall remains bullish as long as the stock trades above Rs 60 level.  CLICK HERE FOR THE CHART

Shares of Rail Vikas Nigam have doubled since the beginning of this year. The robust trend continues to entice retail traders, as the daily volume set-up shows a strong interest. The next leg of upside will be seen above the resistance of Rs 80, which needs to be sustained for an ascending rally. CLICK HERE FOR THE CHART

Rites has a bearish formation, which if materializes, may drag the stock into a bear grip. The “Head and Shoulder” formation has a neckline at Rs 350, which threatens the stocks’ positive bias, and must be safeguarded to avoid any further misery. If the stock loses the cushion of Rs 350, it can then slip beneath the Rs 300 mark. CLICK HERE FOR THE CHART