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IRFC Share Price Hits New Record Highs. Can it Sustain the Rally?

IRFC share price hit new record highs on Tuesday, reaching an intraday high price of Rs 213.24. At the time of writing, however, the share price was down by 196.65, having shed 2.6 percent. Railway stocks are on a hot streak, with the RVNL share price also hitting new highs this week.  The rally follows news that Indian Railways had started the production of 200 non-AC trains, with 10,000 coaches  to be procured in the 2024-25 and 2025-26 financial years.

The Indian government has prioritized infrastructure development in its near-term and mid-term development plans, and the railways sector has been allocated Rs 2.5 trillion in the current financial year. Overall, it is estimated that Indian Railways will order up to 21,000 wagons per year in the mid-term. Furthermore, this presents a boon for IRFC in its role as a financier, with the corporation expected to fund up to 81 percent of the orders.

Looking ahead, IRFC share price could potentially come under pressure from profit-takers after the recent rally. The stock has risen by about 14 percent since the month began, and it is likely that some investors will opt to take profits, especially in view of the new all-time highs recorded.  That said, the downside will likely be in the form of a retracement before a continuation of the uptrend, in view of the strong market fundamentals.

Technical analysis

The momentum on 30-minute IRFC share price chart is bullish-leaning, and the buyers will likely be in control as long as action stays above 196.50. In that case, the buyers, who will likely encounter the first resistance at 203.50. If they breach that mark, the resulting momentum will potentially push the price further up to test 213.11.  Conversely, a move below the pivot mark could see the first support coming at 190.00, and extended control by the sellers beyond that point could break the first support. The resulting momentum will invalidate the downside narrative and potentially establish a second support at 183.40.