Should you buy or sell RVNL post Q1 results; here's what chart suggests

The overall bias for RVNL stock is likely to remain positive as long as the stock holds above Rs 490 levels; however, current momentum hints at likely 9 per cent downside risk at the counter.

The stock price of Rail Vikas Nigam Limited (RVNL) opened 0.3 per cent lower at Rs 537 on the BSE, thereby extending its Thursday's near 5 per cent slide after the company reported a fall in earnings. In comparison, the BSE Sensex had surged almost 1,100 points to 79,980 levels at the opening bell. 

For the quarter ended June 2024, RVNL on August 08 reported a 34.7 per cent drop in consolidated net profit to Rs 223.92 crore when compared with Rs 343.09 crore in the corresponding quarter a year ago.

The company's revenue from operations dropped 26.9 per cent year-on-year (YoY) to Rs 4,073.80 crore in Q1FY25 as against Rs 5,571.57 crore in Q1FY24.

 

Earlier in the month, RVNL announced incorporation of its new subsidiary Company 'Rail Vikas Nigam LLC' in Uzbekistan.

RVNL is engaged in the business of executing all types of railway projects including new lines, doubling of rail lines, railway electrification, metro projects and construction of cable-stayed bridges etc.

On the stock exchanges, the RVNL stock price has witnessed a stellar run since the start of the financial year 2023-24; with the stock zooming up to a high of Rs 647 - up 873 per cent - in July 2024 as against the March 2023 close of Rs 68.60.

Post which, the stock has witnessed some profit taking and quotes near about 17 per cent lower compared to its all-time high. The stock, however, trades at almost 341 per cent higher when compared to its 52-week low of Rs 122.

Given this background, here's how RVNL stock seems placed on the technical charts:

RVNL

Current Price: Rs 537

Downside Risk: 8.8%

Support: Rs 525; Rs 498

Resistance: Rs 585

RVNL stock is seen trading below its 20-DMA (Daily Moving Average) for the first time since May 13, 2024. The stock is seen trading close to the lower-end of the Bollinger Bands at Rs 525, below which support is seen in the form of the super trend line at Rs 498.

Key momentum oscillators like the Directional Index and the MACD (Moving Average Convergence-Divergence) are negative, while Slow Stochastic is on the verge of turning favourable. Further, momentum oscillators on the weekly scale are seen sloping downwards, hence the stock may continue to consolidate in the near-term.

As such, the support at Rs 525 and Rs 498 become crucial, as break and trade below the same can lead to a dip towards Rs 490 levels. CLICK HERE FOR THE CHART

Having said that, the overall bias for the stock is likely to remain positive as long as the stock maintains above the recent bullish breakout given in July 2024. The daily chart shows the bullish pivot at Rs 490 levels.

In order to resume its upward journey, the stock will need to conquer its 20-DMA hurdle, which stands at Rs 585. Sustained trade above the same will help the bias turn favourable for the stock.