Railway_201115

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Express Idea

November20,2015

Railway stocksDont miss the train! Join the bandwagon

Technical Analyst:HadrienMendonca

[email protected]

ThisreportispublishedbyIIFLIndiaPrivateClientsresearchdesk.IIFLhasotherbusinessunitswithindependentresearchteamsseparatedby'Chinesewalls'cateringtodifferentsetsof

customershavingvaryingobjectives,riskprofiles,investmenthorizon,etc.Theviewsandopinionsexpressedinthisdocumentmayattimesbecontraryintermsofrating,targetprices,

estimatesandviewsonsectorsandmarkets.

Railway stockshavebeenadarling for tradersespecially inanticipationaheadof theRailwayBudget.This

sectorwhichislongforgottenalmostthroughouttheyear,findsincreasedfundallocationtowardstheendof

thefinancial

year.

Ouranalysisofhistoricaldatasuggeststhattheactioninthesestockssparkoffalmostaquarteraheadofthe

RailwayBudget.A lookbackat theperformanceof railway stocks in thepast fiveyears throwsapleasant

surpriseasmostoftherailwaystockshavechuggedaheadanddeliveredhandsomereturns inaveryshort

time.

Givenbelowarefewstockswhichhavefaredprettywellintermsofpercentagereturns.

Date

KALINDEERail

%returns

TEXRAIL

%returns

TWL

%

returns

Nov2011toFeb2012 8 (10) 8

Nov2012toFeb2013 35 20 15

Nov2013toFeb2014 16 42 31

Nov2014toFeb2015 61 60 158

Averagereturns 30 28 53

Our Recommendations:

KalindeeRailEngineering

InvertedHead&Shoulderbreakout:After taking supportat its100WMA, the stock consolidatedand

piercedthenecklineoftheinvertedH&Spatternconfirmingthebreakout.Ifthepatternunfoldstheway

weexpect itto,apotentialtargetforthestockcouldbeRs.170.OnthedownsideRs.125onaclosing

basisshouldbethestoploss.

TexmacoRail&Engineering

Cup&Handlebreakout:TEXRAILhasgivenacupandhandlebreakoutandtheoutburstwasconfirmed

after pricepenetrated thenecklineof thebullish pattern. The upthrust is accompaniedwith a strong

pickupin

trading

volumes.

We

expect

TEXRAIL

to

carry

forward

the

current

momentum

and

make

adash

towardstheRs165mark.ThepatternwouldbevoidifthestockclosesbelowRs.125.

TitagarhWagonsLimited

Symmetricaltrianglebreakout:Afterbeingstuckinanarrowtradingrangeforthepastthreemonths,the

stockhasbrokenoutofasymmetricaltrianglepattern.Aprojectionoftheupside fromthepattern,we

seethestockmakingadashtowardstheRs.145markinmediumterm.Onthedownside,Rs.109iscritical

supportforthestock.

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Sector: Railway

Sensex: 28,355

52Weekh/l(Rs): 172/97

Marketcap(Rscr): 233

6mAvgvol(000Nos): 59

Bloombergcode: KRNEIS

BSEcode: 522259

NSEcode: KALINDEE

FV(Rs): 10

Prices as on November 19, 2015

Sharepricetrend

60

80

100

120

140

160

Nov14 Mar15 Jul15 Nov15

KALINDEE Sensex

Shareholdingpattern(%) Mar15 Jun15 Sep15

Promoter 41.6 41.6 42.9

Insti 3.5 8.7 7.0

Others 54.9 49.7 50.1

Rating: BUYTarget(36months): Rs170

CMP: Rs140

Upside: 20%

Stoploss: Rs125

Kalindee Rail Nirman (Engineers)

Express Idea

Sustainingthetrendreversal

On theweekly charts,KALINDEE had broken its four year declining trend in

early2014.Sincethen,thestockralliedover33% injustthreemonths.Post

the

smart

rally,

the

stock

once

again

slipped

into

a

short

term

declining

trend.

Thistimearound,KALINDEEhasfoundstrongsupportatits100WMA,which

also coincides with the fouryear declining trendline support and has

managedtosustaintheuptrend.

InvertedHead&Shoulderbreakout:

After takingsupportat its100WMA,thestockentered intoaconsolidation

zone during which Kalindee formed an inverted head and shoulder pattern,

whichisconsideredtobeabullishone.Itpiercedthenecklineofthepattern,

whichwasplacedatRs135andalsomanagedtocloseabovethesame.The

outburst

is

also

accompanied

with

smart

pickup

in

trading

volumesconfirmingthebreakout.Infact,KALINDEEsprevioustwodaysvolumeshave

surpassed six months traded volumes. If the pattern unfolds the way we

expectitto,apotentialtargetforthestockcouldbeRs170.Ifthestockslips

belowRs.125onaclosingbasis,theabovetheorywouldbevoid.

Roundingbottombreakout:

On assessing the long term monthly chart, the stock is forming a classic

rounding bottom pattern indicating the ongoing accumulation happening in

the stock. If KALINDEE manages to close above the Rs140 mark, it would

confirm

a

multimonth

breakout

and

also

a

rounding

bottom

breakout

on

longtermchartsfurtherstimulatingourbullishviewonthestock.

Dailychart

14:J A S O N D 15:J F M A M J J A S O N

Log IR IS

Source : www.SpiderSoftwareIndia.Com 78.00

84.00

90.00

96.00

102

108

114

120

126

132

138

144

150

156

162

168

Lk

50.00

100

150

40.00

60.00

Price Avg3(S,50,S,100,S,200)

Vol

RSI(14,E,9)

KALINDEE [N14697]134.80, 144.95, 133.80, 141.00, 656050 6.05%

Dly

0

Source:

Spider

Software

India,

India

Infoline

Research

InvertedHead&Shoulderbreakout

Head

LS

RS

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Sector: Railway

Sensex: 28,355

52Weekh/l(Rs): 171/100

Marketcap(Rscr): 2,938


Bloombergcode: TXMREIS

BSEcode: 533326

NSEcode: TEXRAIL

FV(Rs): 1


Sharepricetrend

60

80

100

120

140

160


TEXRAIL Sensex


Promoter 54.8 54.8 54.8

Insti 34.3 34.3 34.3

Others 10.9 10.9 10.9


CMP: Rs139

Upside: 18.7%

Stoploss: Rs125

Texmaco Rail & Engineering

Express Idea

FlagBreakout:

After a sharp rally in TEXRAIL, the bull flag on the monthly chart seems to

haveprovidedabreatherbeforeyetagainrallyingoffinthesamedirectionas

its

primary

trend.

It

has

set

the

stage

for

a

rapid

and

even

larger

rally.

The

stocktookapauseandslippedforalmosteightmonthsgivingopportunities

to investors toaccumulate the same, post which,TEXRILjust blasted ahead

indicatinganendtotheeightmonthdecliningtrend.

Cup&Handlebreakout:

On analyzing the daily chart, TEXRAIL has also given a cup and handle

breakout.Theoutburstwasconfirmedafterpricepenetratedthenecklineof

thebullishpattern,whichwasplacedatRs.131.Inaddition,theupthrust is

also accompanied with a strong pickup in trading volumes; the stock is

trading

well

above

all

its

moving

averages.

We

expect

TEXRAIL

to

carryforwardthecurrentmomentumandmakeadashtowardstheRs165mark.

TheabovepatternwouldbevoidifthestockclosesbelowRs.125.

Dailychart

14:D 15:J F M A M J J A S O N

Log IR IS

Source : www.SpiderSoftwareIndia.Com

90.00

96.00

102

108

114

120

126

132

138

144

150

156

162

168

Lk

50.00

100

150

30.00

40.00

50.00

60.00

70.00

PriceAvg3(S,50,S, 100,S,200)

Vol

RSI(14,E,9)

TEXRAIL [N21828]134.95, 144.00, 134.50, 139.85, 1016296 5.47%

Dly

0

D 0

Source:SpiderSoftwareIndia,IndiaInfolineResearch

Cup&Handlebreakout

Cup

Handle

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Sector: Railway

Sensex: 28,355

52Weekh/l(Rs): 175/47

Marketcap(Rscr): 1,390


Bloombergcode: TWLIS

BSEcode: 532966

NSEcode: TWL

FV(Rs): 2


Sharepricetrend

60

110

160

210

260

310


TWL Sensex


Promoter 53.1 53.1 46.1

Insti 13.3 16.8 25.6

Others 33.7 30.2 28.3


CMP: Rs121

Upside: 19.8%

Stoploss: Rs109

Titagarh Wagons Limited

Express Idea

SymmetricalTrianglebreakout:

TWL was stuck in a narrow trading range for the past three months. On

analyzingthedailychart,thestockhasbeeninaprocessofcreatingacoilora

contracting

wedge,

which

is

wide

at

the

beginning

and

narrowing

towards

the

end.Thispatternusuallyformsduringatrendasacontinuationpattern.With

TWLsprimarytrendbeingupwards,weexpectthestocktomoveinthesame

direction. A projection of the upside from the Symmetrical Triangle

breakout, we see the stock making a dash towards the Rs145 mark in

mediumterm.Onthedownside,Rs.109iscriticalsupportforthestock.

Takingsupportatits200DMA:

Historically,the200DMAhasturnedouttobeanimportantsupportzonefor

TWL.Lookingbackatitssignificance,TWLhasneverbreachedbelowits200

DMA

since

March

2014

and

has

almost

bounced

approximately

on

fiveoccasionssincethen.

On the weekly chart, the stock has retraced almost 38.2% of its previous

decline.FromMarch15toJune15,thestockfellfromahighofRs.174toa

lowofRs.87.Weexpect, thecurrent momentumwould takeTWL towards

thefirsthurdleof50%atRs.131andoncepastthatobstacle,wesee61.8%

retracement level as the potential target, which also coincides with the

SymmetricalTrianglebreakoutprojectionofRs.145.

Dailychart

15:F M A M J J A S O N

Lo g IRIS

Source : www.SpiderSoftwareIndia.Com

60.00

67.50

75.00

82.50

90.00

97.50

105

113

120

128

135

143

150

158

165

173

Lk

100

200

300

400

40.00

60.00

80.00

PriceAvg3(S,50,S,100,S,200)

Vol

RSI(14,E,9)

TWL [N15414]112.95, 121.80, 112.00, 120.45, 4038585 8.03%

Dly

0

1

S 10:2 D 0

Source:

Spider

Software

India,

India

Infoline

Research

SymmetricalTrianglebreakout

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Best Broker of the Year by Zee Business for contribution to brokingNirmal Jain, Chairman, IIFL, received the award for The Best Broker of the Year (for contribution to broking in India) at India's Best Market Analyst

Awards 2014 organised by the Zee Business in Mumbai. The award was presented by the guest of Honour Amit Shah, president of the Bharatiya

Janata Party and Piyush Goel, Minister of state with independent charge for power, coal new and renewable energy.

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contribution of India's financial leaders and visionaries from January 2010 to January 2011.

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firms across Asia, which culminated in the Country Awards 2011

Other awards

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GLOBAL PRESENCE

2009, 2012

& 2013BEST MARKET

ANALYST

BEST BROKERAGE,

INDIA

MOST IMPROVED,

INDIA

BEST BROKER,

INDIA

2009FASTEST GROWING

LARGE BROKING HOUSE

AnExpress Idea isarecommendationbasedonourviewonthesectorand/orstockfromaneartomediumtermperspective,

typicallylessthanthreemonths.Theviewcanbebasedonfundamentalsand/ortechnicalparametersforthestockand/orour

viewonthesectoronthewhole.

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