The stock market often moves up and down based on global news and economic changes. Last week, we saw how quickly things can turn. A ceasefire between India and Pakistan led to a strong rise in the stock market. The Nifty50 index jumped 4.21%, as investor confidence improved.
As the news calmed market fears, investors started buying into stocks that had dropped earlier due to war worries. Defence stocks gained attention, but one sector quietly started to shine — railway stocks.
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Railway Stocks Making a Comeback
Railway stocks haven’t been in the spotlight much, but last week showed a possible change. These stocks had performed very well until mid-2023 but then fell sharply, dropping 30% to 50% in the second half of 2024. However, things are now looking up again, and a rally seems to be starting.
Since there is no official index for railway stocks on NSE or BSE, Definedge created its own – the Definedge Railways Equal Weighted Index. This index tracks 11 major railway-related companies:
- BEML
- Container Corporation of India
- IRCON International
- IRCTC
- Indian Railway Finance Corporation
- Jupiter Wagons
- RailTel Corporation
- RITES
- Rail Vikas Nigam
- Texmaco Rail Engineering
- Titagarh Rail Systems
These companies represent the core of India’s railway infrastructure and services. Watching their performance can give us a clue about the future of the railway sector.
Positive Technical Signs
The Definedge Railways Index has shown strong support at the 200-week Exponential Moving Average (200WEMA) — a key technical level that often signals trend reversals. This support helped start the recent upward trend.
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Another positive signal is the Relative Strength Index (RSI) — a tool that tells us if stocks are gaining strength. The RSI for the railway index has now moved above 50, a level that suggests bullish (positive) momentum. In fact, this is the highest RSI seen for the index in 2025 so far.
Sector-Wide Strength
Even more encouraging, all 11 railway stocks in the index are showing rising RSI levels for the first time this year. This means the entire sector is gaining strength, not just one or two companies. Such broad participation often indicates a strong and possibly lasting rally.
Should You Invest?
While the current trend in railway stocks looks exciting, it’s still early. If you’re someone who prefers to invest for the medium to long term, this sector could offer a promising opportunity. However, it’s important to stay cautious and do your own research.
So, are you ready to board the railway stock train?
Disclaimer: This article is for educational and informational purposes only. It is not a stock recommendation or financial advice.
