Stock in Focus: Rail Vikas Nigam gives channel breakout

Henil Shah
Stock in Focus: Rail Vikas Nigam gives channel breakout 1240 0

Bullishness intact for Rail Vikas Nigam Limited.

Rail Vikas Nigam Ltd (RVNL) had a spectacular journey if we sheerly look at its performance. RVNL in the last one year has ascended by around 100 per cent outperforming Nifty 50 by 50 per cent. Looking at its performance on a year-to-date (YTD) basis, the stock springs up around 50 per cent, whereas benchmark indices rallied around 30 per cent.  

 

From March 2020 to January 2021, RVNL has been moving northwards before entering into a consolidation phase. Post a healthy consolidation for almost nine months, the stock gave channel breakout this week on weekly charts with increased volumes. The stock this week has run over 39 per cent. Today, the stock closed with gains of around 18 per cent to hit an all-time high. 

 

Above is the weekly chart of Rail Vikas Nigam Ltd. 

 

However, the Relative Strength Index (RSI), has moved into an overbought territory hovering at 80.6 levels. Whereas the 20-week Exponential Moving Average (EMA) of RSI is at 56.78. The stock has moved out of the upper band of the Bollinger band which suggests a possible pullback.  

 

On the other hand, Moving Average Convergence and Divergence (MACD) is in the positive territory and has made a positive crossover last week. Rate of Change (ROC) has shown some strength as it has jumped from 3.37 to 53.2 supporting the breakout on weekly basis. Even the Average Directional Index (ADX) is around the level of 40 supporting the strength of the current bullish momentum. ADX is used to confirm the direction of the trend.   

 

RVNL under the ownership of Indian Railways, Ministry of Railways, Government of India acts as an Umbrella Special Purpose Vehicle (SPV) in order to undertake project development, mobilisation of resources, etc.  

 

On Friday, RVNL opened at 36.5, made a low of 35.75 and closed at a high of 43.05. 

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