Technical Analysis

Tech Query: IRCTC trades in overbought territory

Yoganand D | Updated on June 12, 2021

I am holding the stocks of IRCTC at ₹1,606 and PVR at ₹1,164. Kindly advise if I should continue to hold them.

NSN Sastry

Indian Railway Catering and Tourism Corporation (₹2,093.7): The stock of IRCTC was in the limelight last week and surged 8.9 per cent, breaking above a key barrier at ₹2,000. This rally has strengthened the long-term uptrend that has been in place since October 2019. Key resistance at around ₹2,000 had limited the upside in February 2020 and once again in March this year. But this level has been surpassed now and could act as a key base. That said, if the stock falls below this level on the back of selling interest and profit booking, it can decline to ₹1,930 and then to ₹1,800.

A further decline below ₹1,800 will alter the short-term uptrend that has been in place from the April low of ₹1,541 levels. In that case, the stock can decline to ₹1,700 and then to ₹1,600 levels. On the upside, immediate resistance is at ₹2,200 and a breach of this level can pave the way for an up-move to ₹2,400 and then to ₹2,500 levels over the long term. As the stock has delivered 30 per cent gains, you can consider booking partial profits at this juncture and consider re-purchasing at lower levels. You can hold the stock with a long-term stop-loss at ₹1,350. The stock has a significant long-term support at ₹1,400 which can provide base on a decline below ₹1,600 levels. Next long-term support below ₹1,400 is placed at ₹1,300.

PVR (₹1,439.3): The stock has been in a short-term uptrend since it took support at ₹1,000 in mid-April this year. It trades well above the 21- and 50-day moving averages. But the stock now hovers in the overbought territory, indicated by daily relative strength index. Besides, the stock faces a key vital resistance ahead at ₹1,500 from which it had reversed down early this year. Hence, consider booking partial profits off the table at this juncture and stay invested with a stop-loss at ₹1,180.

A conclusive breakthrough of the hurdle at ₹1,500 can push the stock northwards to ₹1,600 and then to ₹1,700. Next resistances are at ₹1,800 and ₹2,000. Conversely, if the stock slumps below the immediate support level of ₹1,300, that can bring back selling pressure and drag the stock lower to ₹1,200. Subsequent supports are placed at ₹1,200 and ₹1,100 levels.

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Published on June 12, 2021

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