Last year, during the Interim Budget 2024-25, the railway and defence sectors were in the spotlight. Rail Vikas Nigam (RVNL) and Indian Renewable Energy Development Agency (IREDA) performed exceptionally well, while most railway stocks underperformed.
From February 2024 to the present, the Nifty 50 has delivered a decent 8% return, whereas RVNL and IREDA outshined with gains of 45% and 20%, respectively.
With the upcoming first full budget from the NDA government after securing a third consecutive term in the Lok Sabha elections, we may witness sector rotations and fresh policy incentives. The railway sector is expected to receive substantial capital allocation, making it a potential area of focus for investors.Source: Investing.com
Performance of PSU Railway Stocks
Only two of the six recently listed PSU railway stocks have performed well, while the other four have remained underwhelming since February 2024. Based on technical and fundamental analysis, two stocks stand out as strong contenders for a rebound:
- IRCTC: From Budget 2024 to Budget 2025, IRCTC has delivered a -14% return. After reaching a high of ₹1,130 in 2024, the stock is trading near a long-term support level of ₹780. Several technical indicators suggest a potential recovery in the near future:
⦁ Falling Wedge Pattern – The stock has formed a falling wedge, which is a bullish reversal pattern.
⦁ Volume Surge – Recent price and volume movements indicate growing investor interest, a positive sign for potential upside.
⦁ RSI Divergence – The 14-period RSI has shown a three-bar divergence, signalling an upcoming trend reversal.
Source: Investing.com
Outlook
IRCTC’s price correction from ₹1,130 to ₹743 over the past eight months suggests it is trading in a strong accumulation zone. Multiple short- and long-term support levels reinforce the possibility of an upward move from here.
- IRCON: IRCON had a strong start in 2024, but in the year’s second half, the stock corrected from ₹350 after delivering a 72% return from Budget 2024 to Budget 2025. However, its daily chart suggests a renewed bullish trend, supported by the following indicators:
⦁ Bullish Harami Candlestick Pattern – A bullish reversal pattern has formed at the stock’s bottom.
⦁ Double Bottom Formation – The stock is on the verge of a breakout from a bullish double-bottom pattern.
⦁ RSI Strength – The 14-period RSI has shown a bullish divergence, further strengthening the case for an upward move.
Source: Investing.com
Outlook
IRCON’s price correction from ₹351 to ₹180 over the past six months and current chart setup suggests it has completed correction phase also it is trading in a strong accumulation zone. Multiple short- and long-term support levels reinforce the possibility of an upward move from here.
Railway Stocks: Gearing Up for a Promising Future
Increased budget allocations for the railway sector and higher travel demand during the summer vacation period could strongly boost railway stocks.
Among the various PSU railway stocks, IRCTC and IRCON stand out due to their robust chart patterns and technical indicators, suggesting that they may deliver strong returns in the near future.
Disclaimer
Note: The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.
As per SEBI guidelines, the writer and his dependents may or may not hold the stocks/commodities/cryptos/any other assets discussed here. However, clients of Jainam Broking Limited may or may not own these securities.
Kiran Jani has over 15 years of experience as a trader and technical analyst in India’s financial markets. He is a well-known face on the business channels as Market Experts and has worked with Asit C Mehta, Kotak Commodities, and Axis Securities. Presently, he is Head of the Technical and Derivative Research Desk at Jainam Broking Limited.
Comments are closed.