Analysts Say IRFC Shares May Still Breach ₹200 Levels And More, But Advise Caution

IRFC share price looks set to break its eight-straight day losing streak on Friday.

What Happened: Shares of the railway major have been under pressure in the past few days, falling 10% fall over the last five sessions as disappointment over a lack of railway-related announcements in the budget weighed heavy on the stock. However, the scrip is seeing some positive movement today.

What Technical Analysts Think: “IRFC has exhibited a bearish divergence on the Weekly Relative Strength Index (RSI). Bearish divergence occurs when the price of an asset is rising while the RSI is falling, indicating that the upward momentum is weakening, and a potential decline may follow,” said Jigar S Patel, senior manager, technical research analyst at Anand Rathi Shares and Stock Brokers.

He added that this technical indicator suggests that IRFC is vulnerable to further declines. As per Patel, a key level to watch is 170. If the stock closes below this level on a weekly basis, it could signal a deeper decline, potentially down to the 160 level, he said.

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He advises investors to avoid taking long positions unless IRFC manages to close above 210 on a weekly basis, which would indicate a potential for upward movement.

“IRFC is currently retesting a 112-day cup and handle breakout pattern on the daily chart at 185, making it a potential buy opportunity, with a stop-loss below 165 on a closing basis and a near-term target of 225, this stock shows promise,” said Anshul Jain, head of research at Lakshmishree.

Jain, however, warned that traders need to be cautious as many public sector stocks have lost momentum following the budget. “It is advisable to trade in small quantities to manage risk effectively. This strategy allows for participation in potential gains while mitigating exposure to any sudden market shifts,” the analyst added.

“The stock has given a good breakout above its swing-high resistance levels and currently seen to be consolidating well above the 180 mark. Immediate support is placed around the 175 mark below which the next support is near 160 levels. We should see the stock likely heading towards 200 and above targets as this rally continues,” said Riyank Arora, technical analyst at Mehta Equities.

Price Action: IRFC’s share price was up 1.38% to trade at 186.09 on Friday afternoon.

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