IRFC, RVNL shares snap 7-day winning run. Technical levels to watch out

Multibagger stocks Indian Railway Finance Corp (IRFC) and Rail Vikas Nigam Ltd (RVNL) on Wednesday snapped a seven-day winning run with sharp cuts, making traders wonder whether the rally on the two counters is over. IRFC fell 6.98 per cent to hit a low of Rs 67.23 earlier today. RVNL, on the other hand, declined 5.55 per cent to a low of Rs 147.95.  Despite the fall, RVNL shares are still up 118 per cent this calendar while those of IRFC are up 108 per cent during the same period. Some further profit booking on the IRFC counter cannot be ruled out, said technical analysts who are mixed on RVNL prospects.  

IRFC technical outlook

Vaishali Parekh of Prabhudas Lilladher said the IRFC stock has started cooling off after witnessing the decent spurt. She said the stock is seeing resistance near the 75 level. The technical analyst believes some profit booking cannot be ruled out on the counter in coming days.

"The near term support would be near Rs 63 level, where it can consolidate, before further fresh rise. At the same time, a decisive breach below Rs 63 shall weaken the overall trend," he said.

On the weekly chart, Pravesh Gour, Senior Technical Analyst at Swastika Investmart said the counter witnessed a breakout of the bullish pennant pattern formation with the strong volumes. "After this breakout, the stock jumped 42 per cent and moved to all-time high level of Rs 75.70. At the current level, the structure of the counter has become very expensive for taking new positions. Risky traders can take positions at Rs 66–67 levels for a target of Rs 80-plus. with a stop-loss of Rs 60," Gour said.

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RVNL technical outlook

On RVNL, Parekh of PL said the stock witnessed a strong run in the last two weeks and found resistance near Rs 163 level. It saw profit booking and cooling off from peak levels, she said.

"The near term support would be Rs 146, below which the overall trend would weaken. The RSI has been hovering near the highly overbought zone and, so, exhaustion is anticipated. For further fresh move ahead, a decisive breach above Rs 163 is necessary to carry on with the momentum," Parekh said.

Gour of Swastika Investmart said the counter witnessed a breakout of upward-sloping channel formation at the Rs 147 level with strong volumes and retested its last breakout level of Rs. 147, which was acting as a demand level. The structure of the counter looks good, as the stock is trading above its important moving averages, he said.

"MACD (moving average convergence divergence) is supporting the current strength, whereas the momentum indicator RSI (relative strength index) is also positively poised. On the upside, Rs 180 is the immediate hurdle; above this, we can expect a move towards Rs 200+. On the downside, Rs 137 is a strong demand zone during any correction," he said.

 

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