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IRFC breaks out: Surges to become 7th most-valued PSU as market cap crosses Rs 1 lakh crore

11 December 20233 mins read by Angel One
Indian Railway Finance Corp. Ltd shows potential for a breakout, with a consolidation phase and a key trendline indicating an up-flag pattern.
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Indian Railway Finance Corporation Ltd., a key player in the business of borrowing funds to finance assets leased out to the Indian Railways, has been on a notable trajectory. Founded in 1986 and headquartered in New Delhi, the company plays a crucial role in supporting the financial needs of the Indian Railways.

Technical analysis

A recent analysis of Indian Railway Finance Corporation Ltd.’s stock performance unfolds an intriguing narrative. Over the past three months, the stock has undergone a consolidation phase, fluctuating within a range of Rs 84.80 and Rs 65.75. Notably, in recent trading sessions, a significant trendline has emerged, connecting the peak of September 14, 2023, at Rs 82 with the point on October 18, 2023, at Rs 80.70. This trendline acts as a pivotal indicator for the breakout level of the continuation price pattern known as the Up-flag pattern, positioned at Rs 78.

In a recent development, Indian Railway Finance Corp. Ltd. swiftly reached an intraday high of Rs 83.20, marking a surge of over 7% in the first half of the trading session. This remarkable movement is supported by robust trading volumes, exceeding 175 million shares, positioning the stock just beneath the critical breakout trendline. The entire trading action gains additional support from the crossover of short-term daily moving averages (5-13-26). The confirmation of a daily close above the breakout trendline (Rs 78) is expected to underscore the stock’s inherent strength and untapped potential.

Future outlook

As we look ahead, the outlook for Indian Railway Finance Corp. Limited paints an alluring picture, with a minimum target of approximately Rs 100 on the horizon. Should this projection materialize, it would signify a remarkable surge of over 25% from the breakout threshold, making it an appealing prospect for both momentum breakout traders and long-term investors.

In light of these compelling developments, Indian Railway Finance Corp. Limited’s stock holds significant promise for astute investors. With its impressive track record in the railway infrastructure sector, the company stands as a noteworthy player to monitor as market dynamics continue to evolve incessantly.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions

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