Rail Vikas Nigam shares have given stellar returns in a four-day run-up, despite consolidation in broader markets. The stock surged 19 percent on April 25, taking four-day gains to over 40 percent. It has seen above-average volumes in last two sessions of the previous week and this week on both days, the volumes remained robust. It ended at record closing high of Rs 104.60.
After breaking long, downward sloping resistance trendline adjoining multiple swing highs from November 29 last year, RVNL maintained its uptrend with trading above all key moving averages (21, 50, 100 and 200-day EMA - exponential moving average).
The stock has formed a robust bullish candlestick pattern on the daily charts for yet another session, with making higher highs higher lows for four days in a row.
Momentum indicator MACD (moving average convergence divergence) remained bullish on the daily as well as weekly charts. RSI (relative strength index) at 88.50 on the daily charts and 79.5 on the weekly scale also showed strong positive crossover, but it seems to be looking a bit oversold.
Hence, experts advised partial profit booking and keep the rest with a potential target of Rs 120.
"RVNL's stock is experiencing a strong upward momentum, as indicated by its record high price. Furthermore, higher timeframe charts reveal a breakout with rising volumes, suggesting that there is a significant long build-up behind the current prices," Vidnyan Sawant, AVP - Technical Research at GEPL Capital said.
One can book partial profits here and ride the rest of the trend till Rs 120 levels, while the stop-loss must be 98 on the closing basis, he advised.
Foram Chheda, Technical Research Analyst and Founder of ChartAnalytics.co.in, also said the breakout and the extension of the move have come with an exceptional increase in the volume; this demonstrates strength in the price move.
However, from a trading perspective, she also agreed with Vidnyan saying that it would be prudent to consider booking partial profits; and trail the stop-loss below 90.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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