Analyst cautioned against the high-flying Industrial Finance Corporation of India (IFCI) as the stock is near an all-time high and in overbought territory on the charts.
What Happened: Shares of IFCI have soared around 18% in the last 5 days. On Wednesday, the stock rose 20%. It’s not clear what led to the rise of the stock.
Jigar S Patel, senior manager – technical research analyst, Anand Rathi Shares and Stock Brokers said investors should be careful with the stock as it is coming near its historical high of 94.58 which was last seen in December 2007.
“This resistance level could trigger selling pressure. Additionally, the Relative Strength Index (RSI) on the monthly chart is extremely overbought, hovering around the 80 mark. Such high RSI levels indicate that the stock might be overstretched and could be prone to a price correction. Given these indicators, it is prudent to book profits within the 88-92 range and wait for a substantial correction before considering re-entry. This strategy helps mitigate risk and lock in gains before potential market adjustments.” Patel added.
Price Action: Shares of IFCI closed 0.76% up at ₹84.59 on Thursday.
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