Momentum Pick: Up to 13% near-term gains likely in multibagger IRFC stock
multibagger returns of over 200% in the last 12 months, Indian Rail Finance Corporation (IRFC) shares have emerged from a fresh consolidation breakout and are set for another leg of rally in the short term. The stock has an estimated upside of 13% over the current levels.
The over three-decade-old company is a dedicated financing arm of the Indian Railways for mobilising funds from domestic as well as overseas capital markets.
On Tuesday, the stock hit a fresh 52-week high of Rs 101.50.
The counter has outperformed Nifty in 2023 and over the last 12 months. The latter has given near 17% returns on a YTD and annual basis.
Despite the rally, analyst Sudeep Shah, Deputy Vice President & Head, Technical and Derivative Research Desk at SBI Securities sees a 13% upside in the counter while recommending an ‘Accumulate’ stance.
The stock is expected to test levels of Rs 108 — Rs 113 over short-term, he said while flagging a potential downside considering the recent rally. The investors should maintain a stop loss of Rs 96.
“On December 8, the stock gave a 56-day consolidation breakout amid robust volume.
Since then, it has witnessed a sharp upside rally of nearly 28% in just 7-trading sessions, outperforming frontline indices Sensex and Nifty. The Relative strength comparison with Nifty 500 and Nifty 50 has reached new heights,” Shah said.
The stock is poised for an upside based on technical indicators such as the Average Directional Index (ADX), which shows trend strength at 33.31 on a daily chart and 50.98 on a weekly chart. “Generally, a level above 25 is indicative of a strong trend and in both time frames, the stock is meeting the criteria,” this analyst said.
Shah said all the moving averages and momentum
