 "RVNL, IRCTC, IRFC: Railway stocks trading 33% off highs; time for a relook?")
Even as the benchmark equity indices scaled fresh peaks in September shares related to Indian railways continued to under-perform and languish below key moving averages. Among these momentum stocks such as RVNL and IRFC which had witnessed a frenzied rally earlier seem to be taking a breather.
For the records, most of the rail-related shares hit a new high in July 2024 while the benchmark indices - both the BSE Sensex and the NSE Nifty 50 index registered a summit at 85,978 and 26,277 in the month of September 2024.
The table below shows that IRFC (Indian Railway Finance Corporation) hit a record high on July 15, 2024 at Rs 229 on the National Stock Exchange (NSE). Similarly, Rail Vikas Nigam (RVNL) stock, Texmaco Rail & Engineering and RailTel Corporation of India registered a summit on July 12; while shares of the Indian Railway Catering and Tourism Corporation (IRCTC) peaked on May 23, 2024.
railway stocks
At present levels, these railway-related stocks were quoting up to 33 per cent below from their respective summits. IRFC, RailTel and Texmaco Rail were down up to 33 per cent each; while RVNL shed 25 per cent and IRCTC was down 21 from its high.
In comparison, the BSE Sensex and the NSE Nifty 50 were down around 5 per cent each from their peaks at 81,650 and 25,000, respectively.
Is the price correction in these rail-stocks done or is there more pain left? Here's what the technical charts suggest.
IRCTC
Current Price: Rs 894
Downside Risk: 9%
Support: Rs 865; Rs 856
Resistance: Rs 903; Rs 919; Rs 930
IRCTC stock is seen trading on a fairly bearish note on multiple parameters. The stock is trading below its key moving averages on the daily and weekly time-frames; and the price-to-moving averages action too is negative.
On the downside, IRCTC stock seems on course to test its 20-MMA (Monthly Moving Average), which stands at Rs 814 - a key moving average the stock has managed to hold since August 2023. That apart, key momentum oscillators on the daily and weekly time-frames are trading in oversold zones hence a pullback cannot be ruled out.
For now, near support for the stock is seen at Rs 865 and Rs 856 levels. On the upside, the stock can bounce back to Rs 930 levels; above which a rally to Rs 966 seems likely. Interim resistance for the stock can be expected around its 20-DMA (Daily Moving Average) and the 50-DMA at Rs 903 and Rs 919, respectively. CLICK HERE FOR THE CHART
RVNL
Current Price: Rs 479
Downside Risk: 21.3%
Support: Rs 461; Rs 440
Resistance: Rs 512; Rs 528; Rs 546
RVNL has been trading below its 100-DMA for the last five trading sessions. The stock has been making lower highs and lower lows in recent times; thus underlying the existing negative trend at the counter.
RVNL stock seems on course to test its 200-DMA support at Rs 377; above which the super trend line support on the weekly scale exists at Rs 395. The short-term bias is likely to remain negative as long as the stock trades below Rs 512; above which resistance for the stock is visible at Rs 528 and Rs 546. Near support for the stock can be anticipated at Rs 461 and Rs 440 levels. CLICK HERE FOR THE CHART
Current Price: Rs 153
Upside Potential: 15.7%
Support: Rs 145
Resistance: Rs 162; Rs 170
IRFC stock is seen testing support at its super trend line on the weekly scale at Rs 145. Further, even as the price-to-moving averages action remains unfavourable the lead indicators - such as the key momentum oscillators have turned positive - thus hinting at a possible pullback at the counter.
As long as the support at Rs 145 is held, the stock may look to bounce back and test Rs 177 levels in the near-term. Interim resistance for the stock can be expected around Rs 162 and Rs 170. CLICK HERE FOR THE CHART
RailTel
Current Price: Rs 408
Upside Potential: 12.8%
Support: Rs 400
Resistance: Rs 419; Rs 448
RailTel has been struggling around its 200-DMA for the last five trading sessions. The 200-DMA stands at Rs 419. On the weekly scale, the stock is attempting to protect the 50-WMA (Weekly Moving Average) support at Rs 400 - a key moving average the stock has not violated since April 23.
In case the 20-WMA support is broken, RailTel stock could extend the fall towards the super trend line support at Rs 346; with interim support likely at Rs 378. In case of a pullback, the stock can bounce back to Rs 460 levels, with interim resistance seen at Rs 448. CLICK HERE FOR THE CHART
Texmaco Rail
Current Price: Rs 195
Upside Potential: 18%
Support: Rs 185
Resistance: Rs 202; Rs 209; Rs 217
Texmaco Rail stock too has been trading below the 200-DMA for the last five trading days. That apart, the stock seems to be seeking support around its weekly super trend line at Rs 185. Thus, as long as this support is protected the stock may look to bounce back in the near-term.
As such, Texmaco Rail can pull back to Rs 230 levels; with interim resistance likely around 202, Rs 209 and Rs 217 levels. CLICK HERE FOR THE CHART
