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Tata Steel, JSW Steel, SAIL: A few trading strategies for metal stocks

The moment SAIL crosses 200-DMA at Rs 35.40, a stiff selling pressure can be seen.
Metal stocks were trading with decent gains on Friday. The Nifty Metal index was ruling over 2 per cent higher at 2,116 levels with all the 15 constituents advancing. Hindustan Copper (up over 7 per cent) was the top gainer on the index, followed by NMDC, MOIL, and Tata Steel - all up in the range of 3.5 to 4.2 per cent. 

So, how should you trade metal stocks in the current market? Below is an analysis of the Nifty Metal index and its key constituents on technical parameters. Take a look:

NIFTY METAL: With a positive crossover of 50-day moving average (DMA) with 100-DMA, this index can breakout above the trendline resistance of 2,150 levels. This would result in a rally towards 2,249 which is its 200-DMA. The overall trend looks sideways with immediate support falling around 2,000 levels. The Relative Strength Index (RSI) is resilient to breach 50 value, a sign of a strong upward strength. CLICK HERE FOR THE CHART

 

Tata Steel Ltd (TATASTEEL): The counter has managed to absorb the selling pressure in the range of Rs 350 - Rs 345. This has pushed the strength further resulting in a breakout. The immediate 200-DMA levels of Rs 366.80 can be seen in the coming sessions. The support remains at Rs 340 levels. The RSI has broken above the trendline resistance of Rs 64 value. CLICK HERE FOR THE CHART

 

Vedanta Ltd (VEDL): The consolidation in the range of Rs 115 to Rs 100 levels is waiting for a breakout. The overall momentum is sluggish with volumes drying slowly. Technical indicators like RSI and Moving Average Convergence Divergence (MACD) have made negative crossovers, which suggest weakness. CLICK HERE FOR THE CHART

 

Steel Authority of India Ltd (SAIL): The moment this counter crosses 200-DMA at Rs 35.40, a stiff selling pressure can be seen. Nevertheless, the price is resilient to fall, with lower levels in the range of Rs 32 to Rs 30, witnessing buying momentum. The trend looks promising as every move above 200-DMA is absorbing the selling pressure. With such moves, the counter may be heading towards Rs 42 levels. CLICK HERE FOR THE CHART

 

JSW Steel Ltd (JSWSTEEL): This counter has broken out the resistance of Rs 205 along with RSI conquering 60 values.  Such strong moves indicate further upside towards Rs 218.70 levels, which is its 200-DMA. The immediate closing basis support comes in at Rs 199 levels. The weekly chart shows a stable upside with a “higher high, higher low” formation. CLICK HERE FOR THE CHART



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