IRCTC shares hit 52-week low for fourth session, should you catch the falling knife?

Shares of Indian Railway Catering and Tourism Corporation Ltd (IRCTC) hit 52-week low for the fourth straight session on Tuesday. IRCTC shares opened at a fresh yearly low of Rs 765.30 in the current session against the previous close of Rs 769.80 on BSE. IRCTC shares touched a 52 week high of Rs 1,148.30 on May 22, 2024. Market cap of the firm rose to Rs 62,296 crore. In a year, the stock has fallen 12.19%. 

IRCTC stock has a one-year beta of 1.4. This signals the stock has high volatility. 

A total of 0.47 lakh shares of the firm changed hands amounting to a turnover of Rs 3.64 crore on BSE.

In terms of technicals, the relative strength index (RSI) of IRCTC stands at 30.3, signaling it's trading neither in the overbought nor in the oversold territory. IRCTC stock trades lower than the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages.

Kushal Gandhi, Technical Analyst, StoxBox is very cautious on the outlook of the stock. 

"Share price of IRCTC has declined Rs 366 from its record highs, correcting over 32% without any significant signs of recovery. The current price action is trading below the short-term moving averages, which are acting as immediate overhead resistance. Additionally, the 50-day moving average and 200 DMA indicate a negative crossover, suggesting a decline in price strength and a continuation of sustained selling pressure. The RSI on daily and higher timeframes is also positioned below the median levels with a negative slope, reflecting a loss of momentum. Furthermore, the stock shows a lack of price strength and buyer demand at the current market price. Therefore, we advise against attempting to catch this falling knife."

Hardik Matalia, Derivative Analyst, Choice Broking said, "IRCTC is currently trading near the Rs 780 level, forming a pattern of lower highs and lower lows on the daily chart, signaling a continuation of the prevailing bearish trend. The stock is now approaching a crucial support zone, from where some bounce can be anticipated. This bounce, however, is likely to be driven by profit booking rather than fresh buying interest.  

For a meaningful reversal, IRCTC must achieve a sustainable breakout above the Rs 865 level. A close above this mark would confirm a trend reversal, potentially attracting fresh buying momentum. However, as long as the stock remains below Rs 865, selling pressure is expected to persist at higher levels. On the downside, the immediate support lies at Rs 750; a breach of this level could lead to further declines toward the Rs 700 levels.  

The Relative Strength Index (RSI) stands at 37.19, showing signs of reversal from oversold levels, which supports the possibility of a short-term bounce. However, the RSI alone does not confirm a trend change. Additionally, IRCTC is trading below all its key moving averages, including its short-term (20-day), medium-term (50-day), and long-term (200-day) EMA’s, highlighting the stock's inherent weakness and emphasizing caution for traders in the current market scenario."

AR Ramachandran, SEBI registered independent analyst says, "IRCTC stock price is slightly bullish & also oversold on the Daily charts with strong support at  Rs 767. A Daily close above resistance of Rs 782 could lead to a target of Rs 828 in the near term."

IRCTC reported a 4% rise in net profit to Rs 308 crore in the September quarter against Rs 295 crore in the last-year quarter. Consolidated revenue from operations climbed 7% to Rs 1,064 crore against Rs 992 crore posted in the corresponding period of last year.