'Exit IRFC' Advise Technical Analysts, 'Re-enter' At Better Value

Technical analysts shared cautious views on IRFC after the stock continued to correct on Tuesday, extending its red streak to two consecutive sessions.

What Happened: IRFC has fallen almost 10% since the last month. It has corrected almost 26% from its all-time high of ₹229 hit on July 15. Quant mutual fund recently sold stakes in IRFC, offloading 37.58 lakh shares worth around ₹72.77 crore in August.

Technical Views: Jigar S Patel, senior manager – technical research analyst, Anand Rathi Shares and Stock Brokers said, “At this point, IRFC  appears to be weakening and is moving toward its 200-day Exponential Moving Average (DEMA) at the 151 levels. The 200 DEMA is a significant technical indicator that helps traders identify long-term trends and support levels.

“Interestingly, this level also coincides with a previous breakout zone, a price range where the stock had previously surged, signalling that it could act as a strong support area. This alignment makes the 200 DEMA a potentially attractive point for long-term buyers to consider entering the stock. However, given the current weakness, the recommendation is to be cautious and wait for the stock to test the 200 DEMA before taking any action.”

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Anshul Jain, head of research at Lakshmishree said investors would do better if they exit the stock now and re-enter later for better value. “IRFC, which surged following the budget, is now facing a significant correction. Analysts predict a sharp pullback of nearly 50% from its recent highs, with the price likely to drop to the ₹115-₹125 range. Such corrections are common after strong rallies, and this may be an opportune time for short-term investors to consider exiting the stock.” he said.

“While long-term prospects remain solid, the short-term outlook has shifted. Investors could find better re-entry points once the stock stabilizes at lower levels. To protect recent gains, it’s advisable to step back now and wait for a more favorable buying opportunity in the future.” Jain added.

Price Action: Shares of IRFC was down 1.45% to ₹161.59 on Tuesday.

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