IRFC, RVNL, IRCTC: 5 Common Technical Indicators To Help In Knowing Key Trends Of Railway Stocks

After a brief bearish start in 2024, railway stocks have picked up strong momentum so far with double-digit returns by IRFC, RVNL and IRCTC year-to-date. Railway stocks are in a sweet place to benefit massively from the BJP government win as the election polls have kickstarted since April 19. On April 22, the majority of railway stocks are up.

In terms of fundamentals, the key boosters in railway stocks are currently record high capital allocation by the government, priority in transforming the railway sector including corridors, along with revamping stations and introducing high-speed trains.

Post-election, many reports have stated that the government is likely to implement a 3.0 mega plan with an investment of Rs 10-12 lakh crore including various passenger-friendly measures, like a 24-hour ticket refund scheme, a comprehensive super App for various railways facilities, three economic corridors and sleeper Vande Bharat trains. Q4 earnings of these railway companies will be another key sentiment trigger going ahead.

Amidst the fundamentals, one cannot also ignore the key technical indicators that can help in understanding the trends in railway stocks. It needs to be noted that these common technical indicators apply to all stocks across sectors, and give a brief understanding of the movement of shares and predictions.

Technical Indicators of Top 3 Railway Stocks:

1. IRFC:

On BSE, IRFC's share price rose by 2% on April 22, to Rs 143.60 apiece with a market cap of Rs 1,87,663.75 crore. YTD, IRFC is up by 43%, while in a year, the stock is up by 386%.

As per Trendlyne data, the weekly average delivery volume is 28.22%. Its RSI and MFI are at 46.3 and 50.4 which are stable since these two indicators below 30 are considered oversold and above 70 overbought. MACD is at (-) 0.2, which is below its Signal and Center Line, this is a strong bearish indicator. Further, the Bollinger Band of IRFC is 20,2.

Currently, IRFC's shares have resistance in the range of 143-147.75, while its support level includes 138.25-133.50, as per 5paise.com data.

Rail Vikas Nigam (RVNL):

YTD, RVNL's share price is up by 45%, while in a year, the stock gained by 201% so far. Currently, RVNL shares are up by 2% to trade at Rs 264.15 apiece on BSE during market hours on Monday.

Among key technical indicators, as per Trendlyne data, RVNL's weekly average delivery volume is 29.64%. While it is trading 8 out of 8 SMAs, and above 5 out of 9 Oscillators in bullish zone. MACD(12, 26, 9) is at 2.2, which is above its Center Line, but below the signal line. Further, its RSI and MFI come around 52.1 and 48. The Bollinger bands of RVNL are also a 20-day simple moving average, with 2 standard deviations. RVNL's support levels range from 252.70 to 242.10, while resistance levels are around 263.30 to 273.90 per share.

3. IRCTC:

Indian Railways catering services provider, IRCTC shares have zoomed by over 12% YTD, while their upside is by nearly 66% in a year. On April 22, IRCTC share is also up by over 1% to trade at Rs 1002.55 apiece on BSE.

Coming to its indicators, as per the Trendlyne data, IRCTC's weekly average delivery volume is 29.69%, while it trading above 6 out of 8 SMAs, but below 4 out of 9 Oscillators in the bearish zone. MACD(12, 26, 9) is at 21.3, which is above its centre and signal Line, this is a bullish indicator. Also, RSI and MFI are stable at 53.5 and 66.6. The bolling bands of IRCTC are also at 20,2. Currently, the support levels of IRCTC range from 972.95 to 937.30, and that of resistance is around 1008.60 and 1044.25.

According to brokerage Fisdom, the five key common technical trends are:

1. Volume:

Volume indicates the number of shares bought and sold over a given period. Investors and trades generally compare a chosen stock's volume to its average price for a selected period. Volume gives an investor/trader a good insight into the general market perception of the stock for a given period. This way, they can understand and predict the stock movement and accordingly make trading or investment decisions.

2. MACD:

MACD or Moving Average Convergence Divergence is used by investors/traders to check for trade signals. This technical indicator comprises 2 lines, that is MACD and the signal line. Both these lines move at different paces since the signal line generally moves slower as compared to the MACD line.

If the MACD line crosses the signal line from above, it is an indicator of an uptrend in stock prices. If MACD crosses the signal line from below, the stock price may likely fall further. This information helps investors in deciding whether to buy or sell a stock.

Hence, a MACD above zero - indicates a bullish view and the stock price will likely move upward. While MACD below zero - indicates a bearish period and the stock price may likely go down

3. Support and Resistance:

Firstly, support is triggered by demand of the stock and it keeps the price from dropping down beyond a level. This is the price level, where maximum demand for the stock can be expected. A support level also indicates a high chance of price reversal towards an upside. Actual stock prices are mostly more than the support price levels.

Secondly, the resistance level keeps the stock prices from rising. At a resistance level, a maximum supply of the stock can be expected, indicating high chances of price reversal that will result in stock prices moving downwards. Actual stock prices are generally lower than the resistance price levels.

4. Bollinger Bands:

This indicator is used to gauge the price range of stocks and know how these will move within the given range. The price range width may expand or contract depending on the market volatility. A narrow Bollinger band means that the market volatility is low, whereas a wider band means higher market volatility.

Investors/traders use Bollinger bands to also identify if a stock price is moving outside its band. In case it moves outside the upward band, the stock is said to be overbought. A stock may be oversold if its price is moving below the downward band.

5. RSI:

RSI or Relative Strength Index is a technical indicator that can range from 0 to 100. It is used by investors/traders to understand the current market trend and the strength of momentum. It tells market participants whether a share is currently overbought or oversold.

If a stock's RSI is above 70, it is said to be overbought and the price is likely to fall.

According to the Fisdom report, since the stock market can be very dynamic, with many factors influencing its performance, technical indicators help traders and investors in gauging market trends. These offer useful information that can be used to maximize returns and minimize risks. A new investor or a trader who is just starting with stock market trading can make use of the above-mentioned 5 indicators that are commonly used in the markets.

Disclaimer:

The write-up is just for information purposes, and is not a recommendation for investment by either the author or Greynium Information Technologies. The author, the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns. in advises users to consult with certified experts before making any investment decision.