Tata Steel, JSL: Metals can soar up to 11% if index sustains above 6,041

Except Jindal Stainless, other metal stocks require to cross key barrier to rally forward

Nifty Metal index has surpassed the 200-day moving average (DMA) post February of this year and its stability could propel a rally to new 52-week high. 

With the exception of Jindal Stainless, the present trend in major stocks continues to remain sluggish and require to scale key barriers to march ahead. 

On Friday, shares of Vedanta were seen trading flat, while Tata Steel seen a cut of 1.50 per cent, Jindal Steel & Power and Jindal Stainless both tumbled close to 0.80 per cent.

Here’s the technical outlook for metal stocks:-

Nifty Metal

Likely target:  6,400

Upside potential: 4.50%

The metal index has successfully cross the 200-day moving average (DMA) a few sessions ago and if can manage to sustain over the same, it might show a tremendous upside bias. The 200-DMA is set at 6041-mark. The key support for the index is at 5,900-mark.

Also, the index has broken out of the “Inverse Head and Shoulder” pattern established on the daily chart. Thus, there is a bullish underlying bias and if the index sustains over the 200-DMA, a rally towards 6,400 can be easily achievable. CLICK HERE FOR THE CHART

Vedanta Ltd (VEDL)

Outlook: Support at Rs 270

The trend of Vedanta shares have gone sideways, post the ex-dividend date. It needs to take out Rs 285 to move forward in its bullish bias; however, if the stock drops below Rs 270, it might fall to Rs 255, its 200-DMA.

Furthermore, the genuine trend in the stock would appear once the hurdle range of Rs 305 to Rs 300 is conquered with decisive volumes. Once that happens, medium-term bias could lead to a gradual up move. CLICK HERE FOR THE CHART

Tata Steel Ltd (TATASTEEL) 

Likely target: Rs 125 (once breaks out over Rs 115)

Upside potential: 8.50%

While the present trend for Tata steel shares appears sideways, the price action needs to scale over Rs 115, its significant barrier to breakout on the upside. 

Until that happens, the stock may continue to see accumulation in the range of Rs 105 to Rs 110 levels. A breakout over Rs 115 could see the stock setting new 52-week high of 125. The technical indicator, Moving Average Convergence Divergence (MACD) has moved over the zero line, implying momentum to be supportive of the optimistic sentiment.  CLICK HERE FOR THE CHART

Jindal Steel & Power (JINDALSTEL)

Outlook: Needs to hold Rs 500 mark

Following a sharp decline from Rs 600 levels in May this year, the stock managed to hold on near its 200-DMA. With the support of Rs 500, the stock needs to evolve with chart structure that could offer higher rallies. 

Immediate hurdle are placed at Rs 552 and Rs 567, which are its 50-DMA and 100-DMA levels.  A slip beneath Rs 500 could drive this stock in the direction of Rs 465 level.  CLICK HERE FOR THE CHART

Jindal Stainless Ltd (JSL)

Likely target: Rs 350

Upside potential: 11%

Shares of Jindal Stainless are well placed on charts and are one of the top best bets in metal sector. The stock is reaching closer in setting a new historic peak and with that move; fresh upside to Rs 350 cannot be neglected. Stability over Rs 300 shall endure more positivity. 

Short-term support comes to Rs 316 and medium-term support falls at Rs 280 levels. The current trend is highly lucrative, with price action absorbing all the selling pressure emerging at higher levels, as per monthly chart. CLICK HERE FOR THE CHART