IRCTC, L&T, RVNL: How to trade rail, infra stocks ahead of Budget?

Barring IRFC, RVNL which have rallied sharply in the recent pasts, other rail-related stocks like IRCTC, Titagarh Rail Systems and RailTel could rally up to 23 per cent, suggest charts.

The markets have witnessed a roller-coaster ride so far this week ahead of the presentation of 'Vote on Account' also known as 'Interim Budget' on Thursday February 01 owing to the general elections later this year. 

The finance minister Nirmala Sitharaman has so far hinted that there won't be any big-bang announcement in the Budget proposals to be placed tomorrow.

However, given government's commitment towards infrastructure growth, analysts believe that the sector could get further capex boost in the upcoming Budget.

In a recent interview to Business Standard, Railways minister Ashwini Vaishnaw, said the government is considering investments worth 14 trillion rupees for rail overhaul.

As such, here's what your trading strategy should be towards key infra and rail-related stocks.

Larsen & Toubro

Current Price: Rs 3,470

Resistance: Rs 3,560

Downside Risk: 8%

Owing to Wednesday's over 5 per cent fall, Larsen & Toubro has dipped below its 20-DMA (Daily Moving Average) for the first time since in more than three months. The stock is currently testing support around its super trend line at Rs 3,450, which also coincides with the lower-end of the Bollinger Bands and 50-DMA on the daily scale.

In case, the stock fails to hold this support zone, it can then extend the fall towards Rs 3,200 - ie.e the 100-DMA. On the upside, the stock needs to reconquer its 20-DMA at Rs 3,560 to resume the uptrend. CLICK HERE FOR THE CHART

IRCTC

Current Price: Rs 974

Support: Rs 950

Upside Potential: 8%

IRCTC has witnessed a phenomenal run in the last two months, wherein the stock has jumped by 50 per cent. Off late, the stock is seen testing support around its 20-DMA at Rs 950-odd levels. As long as the stock trades above the same, it may look to jump back to Rs 1,000 - Rs 1,050 levels. CLICK HERE FOR THE CHART

IRFC 

Current Price: Rs 170

Resistance: Rs 185

Support: Rs 160

Downside Risk: 18%

IRFC is likely to trade with a positive bias as long as the stock holds above Rs 160 levels. On the upside, the stock can rally to Rs 185, wherein it is likely to face considerable resistance. 

However, one needs to be cautious at the counter, as key momentum oscillators are in overbought zone. Break and close below Rs 160, could trigger a sharp slide towards Rs 140-odd levels. CLICK HERE FOR THE CHART

Rail Vikas Nigam (RVNL)

Current Price: Rs 302

Resistance: Rs 320; Rs 330

Support: Rs 290

Downside Risk: 19%

Following a sharp rally earlier this month, shares of RVNL are seen consolidating in a band of Rs 290 - Rs 320. Bias for the stock is likely to remain positive as long as the stock holds above Rs 290.

Fresh upside for the stock can be expected only on break of the likely resistance zone of Rs 320 - Rs 330. On the other hand, break and trade below Rs 290 can trigger a fall towards its 20-DMA at Rs 245-odd levels. CLICK HERE FOR THE CHART

Jupiter Wagons

Current Price: Rs 390

Support: Rs 372

Upside Potential: 8%

Jupiter Wagons has declined over 11 per cent from its recent high of Rs 434. Presently, the stock is trading close to its 20-DMA, which stands at Rs 372. As long as the stock holds above the same, it can possibly bounce back to Rs 420 levels. CLICK HERE FOR THE CHART

Titagarh Rail Systems

Current Price: Rs 1,085

Support: Rs 1,066; Rs 1,032

Resistance: Rs 1,150

Select key momentum oscillators like the Slow Stochastic and MACD (Moving Average Convergence-Divergence) have given a negative divergence on the daily scale. Hence, the stock is likely to trade with a tepid bias in the near term.

Presently, the stock is trading near its 20-DMA, which stands at Rs 1,066. In case, of an up move the stock is likely to face stiff resistance around Rs 1,150 levels, whereas on the downside the stock may test Rs 1,032, below which a significant fall seems likely. CLICK HERE FOR THE CHART 

RailTel

Current Price: Rs 429

Resistance: Rs 442

Upside Potential: 12%

RailTel is trading on a fairly bullish note on a multiple time-frames. Key momentum oscillators too are in favour of the bulls. The stock is likely to gain fresh momentum on the upside, on sustained trade above Rs 442 level. Post which, the stock may re-test its recent peak around Rs 460, and rally further higher to Rs 480-odd levels. CLICK HERE FOR THE CHART