Nifty Metal slumps 5% amid crash; time to sell? Here's what charts suggest

Shares of Steel Authority of India (SAIL) may decline another 10 per cent

The Nifty Metal index slumped about 5 per cent on the National Stock Exchange (NSE) on Monday as a meltdown in global equitiy market dented sentiment for export-linked stocks. All the 15 index constituents were in the red, led by Hindustan Copper and Welspun Corp (down 8 per cent each), APl Apollo (7.7 per cent), Jindal Steel and JSW Steel (down over 6 per cent each), and Tata Steel and Adani Enterprises (around 5 per cent each).

According to analysts at Edelweiss Securities, the concerted steel price hike globally (except US) suggests that producers are trying to pass on the elevated coking coal cost. In their view, Q2CY22 is likely to be critical as it is the peak construction period in China and Europe. This would be a

further tailwind for prices.

"In domestic context, Indian steel majors are likely to announce a second round of price increases for sales for the month of Feb-22, after AMNS India raised HRC prices further by Rs 500/t with effect from February 8. In our view, other steel majors are likely to follow suit after having increased prices by Rs 1,000–2,000/t in the preceding week for early Feb 2022 sales," they said in a report dated February 14. 

Against this backdrop, here's how select stocks look on charts:

Nifty Metal
Outlook: The overall outlook remains bullish

The index is well positioned above the neckline of 5,100 level. If this level is violated, then the index may see a big decline, based on the weekly chart. In addition, the 200-day moving average (DMA) holds the immediate support, the average that the stock upholds since the last correction in December 2021. The 200-DMA is set at 5,516 level. The overall outlook continues to trade with a bullish sentiment and the immediate support falls at 5,700, as per the daily candlestick formation. CLICK HERE FOR THE CHART

Steel Authority of India (SAIL)
Likely target: Rs 88
Downside potential: 10%

The shares of the Steel Authority of India continue to trade with a negative bias below the 200-DMA, placed at Rs 113 level. The initial resistance comes to Rs 108 and until the simultaneous hurdles are not overcome, the trend could stay weak, as per the daily chart. On the weak side, the support comes at Rs 88 and Rs 75. The "Lower Low, Lower High" displays a weakness in the stock, as per the weekly chart. CLICK HERE FOR THE CHART
 
Vedanta Ltd (VEDL)
Outlook: Stock is retracting to the breakout mark

The "Rising channel Pattern" confirms the upward trend and, until the lower rising trendline does get breached, the underneath sentiment stays bullish. The range of Rs 330 to Rs 320 remains as the support levels, according to the weekly chart. The immediate support comes to Rs 350 level, which is the breakout mark, based on the daily chart. CLICK HERE FOR THE CHART

Tata Steel Ltd (TATASTEEL)
Outlook: Consecutive negative closes may see more weakness

This is the third attempt by Tata Steel shares to overcome the resistance of 200-DMA. If this is not crossed, the stock may dive in the direction of Rs 1,060 levels, which has remained the reversal mark since November 2021. This can happen if we see volume based negative closing in coming sessions. CLICK HERE FOR THE CHART
 
Jindal Steel & Power (JINDALSTEL)
Outlook: Could see accumulation around breakout mark

The stock has broken out of the 200-DMA resistance, which is placed at Rs 401 levels. Thus, any weakness could be an opportunity to accumulate as it nears 200-DMA. The breakout above 200-DMA is supported by strong volumes and could see more additions near the breakout mark. CLICK HERE FOR THE CHART