I have already highlighted a few sectors that need to be kept on the watchlist during this broader market correction and the Railway PSU sector is one of them. 

While reviewing the chart, the sector appears to be completing an Elliott Wave cycle consisting of an impulse and a corrective structure. The uptrend from June 2022 to July 2024 could be counted as either Wave 1 or Wave A. Subsequently, the correction from July 2024 to October 2026 could represent either Wave 2 or Wave B.

As of the closing price on 23 October 2026, the Railway PSU Sector Index stands at 2,420 and the index could approach its support zone starts from 2,300 and primarily between 2,237 and 2,035. If the index fails to find support within the above-mentioned zone, a deeper support level could be around 1,800.

Chart for Reference 

Assuming the reversal is from 2,237, the expected levels are as follows: 

 1) Wave 3 Scenario: If Waves 1 and 2 are complete and a new Wave 3 begins, the potential fib projection could be around 8,900

2) Wave C Scenario: If Waves A and B are complete and the index begins a Wave C advance, the potential fib projection could be around 6,300. 

NOTE - Key important Points to be noted 

 1) The Railway PSU sector index chart has limited price history. Therefore, our opinion is based on available price data. 

 2) The potential Wave 3 or Wave C is valid only if the index finds support within the expected zone and reverses. The primary confirmation of bullish outlook would come only if the price moves above 4,250. 

 3) Cautious approach is required and if the price goes below 1,700 and our view may change. 

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