RailTel Corporation shares dive 14%; technical analysts suggest 'bearish' trend

Shares of RailTel Corporation of India Ltd on Tuesday slumped 13.68 per cent to hit a day low of Rs 383 against their previous close of Rs 443.70. At today's low price, the stock has slipped 15.42 per cent from its one-year high of Rs 452.80, a level seen on January 20 this year. Even so, the multibagger scrip has rallied 298.13 per cent from its 52-week low price of Rs 96.20, hit on March 28 last year.

The company has secured four work orders so far this month. Most recent was from the South Central Railway, valued around Rs 82.42 crore.

On technical setup, analysts largely remained 'bearish' on the counter. Support could be seen at Rs 380. A close below the said level may induce more pain. That said, immediate resistance will be at Rs 412.

Shiju Koothupalakkal, Technical Research Analyst at Prabhudas Lilladher, said, "The stock saw resistance near Rs 450-454 zone after a strong rally. It has slipped to Rs 382 level due to heavy profit booking. Next major support zone will be near Rs 365-370 levels. A decisive move past Rs 412-417 shall once again strengthen the bias and expect for a further rise to retest the peak zone of Rs 454. The mentioned view shall get negated once a decisive breach below Rs 350 zone is confirmed and thereafter, more slide can be anticipated."

Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, "Support will be at Rs 380 and resistance at Rs 450. A decisive close above Rs 450 level may trigger a further upside till Rs 500. Expected trading range will be between Rs 350 and Rs 500 for a month."

AR Ramachandran from Tips2trades said, "Railtel Corp's stock price looks bearish and also overbought on daily charts with next resistance at Rs 477. Investors should book profits at current levels as a daily close below support of Rs 377 could lead to Rs 346 in the near term."

DRS Finvest founder Ravi Singh said, "The stock is looking weak and it may slip towards Rs 380 level. Resistance will be seen at Rs 412."

Rail PSU counters have witnessed a strong surge this month on expectations of a record capex allocation for the sector in the upcoming Budget, due to be presented on February 1.

In an interaction with Business Today TV, Brijesh Ail, Head of Technical & Derivatives, IDBI Capital Markets & Securities, said, "At present, traders should avoid taking new positions in railways counters. Although, the overall view remains positive. Hold your long-term positions but don't take any fresh trading bet."

RailTel Corp, a Mini Ratna (Category-1) PSU, is an information and communications technology (ICT) provider and one of the largest neutral telecom infrastructure providers in the country with a pan-India optic fiber network. As of June 2023, the government holds a 72.84 per cent stake in the company.

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