Jindal Steel, SAIL, Jindal Stainless: 3 metal stocks that can slip further

The Nifty Metal index faces strong resistance at its 100-days moving average, currently located at 3,040 levels. The overall chart formation indicates a breakdown of "Head and Shoulder pattern

The benchmark indices are ripe for profit booking, technical charts suggest. The upward rising trend line for Nifty50 at 11,550 and BSE Sensex at 38,500 indicates profit booking and now face selling pressure. Such instances evaluate the strength and reversal in other indices as well; and the Nifty Metal is one such index that is looking to reverse its trend.

NIFTYMETAL: The Nifty Metal index faces strong resistance at its 100-days moving average (DMA), which is currently located at 3,040 levels. The overall chart formation indicates a breakdown of “Head and Shoulder pattern” below 2970 level. The two shoulders having high of 3,035 and 3,055 have broken the neckline of 2,970 suggesting a further downside, which may take the index to 2,870 and then 2820 levels in the coming sessions. The overall trend for the index is not satisfactory, considering 3000 – 3100 level has now become the pressure range. The index is also trading below its 200-DMA, as per the daily chart pattern. CLICK HERE FOR THE CHART

Considering this, its adverse effect may eventually lead to weakness in stocks as well, which include:

JINDAL STEEL AND POWER (JINDALSTEEL): The stock is witnessing selling pressure above Rs 173 level as per daily chart. On the other hand, a breach of Rs 161 will further dent the overall trend, leading to a breakdown towards Rs 154 and Rs 147 levels. The 50-day moving average (DMA) is placed at Rs 149, which if broken decisively, may drive more sell-off. MACD (moving average convergence and divergence) has made a negative crossover above zero line, indicating weakness. CLICK HERE FOR THE CHART

JINDAL STAINLESS (HISAR) (JSLHISAR): The stock has broken significant support of Rs 90 on closing basis resulting in negative sentiment and weakening of positive trend. The trading signal in such scenarios validate shorting opportunities and liquidating any long positions. The immediate support comes at Rs 85 level. A breach may lead towards Rs 78 and Rs 75 levels going ahead. However, a close above Rs 91 may change the negative trend for the stock. CLICK HERE FOR THE CHART

STEEL AUTHORITY OF INDIA (SAIL): The RSI divergence is clearly visible on the daily chart, which denotes weakening of an upward trend with an expectation of selling in the near future. The immediate support comes at Rs 49.40, its 50 (DMA). A breach on the downside can take the counter to Rs 46 and then to Rs 44 levels. The resistance comes at Rs 55 levels. CLICK HERE FOR THE CHART