Vedanta, JSW can soar up to 18% as Nifty Metal eyes 'Golden Cross' breakout

The Nifty Metal index can rally up to 11 per cent following the breakout. Among individual stocks, Tata Steel needs to conquer its 200-DMA to gain strength.

The domestic benchmark indices began the week on a shaky note amid concerns over further policy tightening by the US Federal Reserve. The Sensex and Nifty 50 opened gap-down with a cut of 1.25 per cent each.

Similarly, major markets in Asia too were seen trading with deep cuts. The Hang Seng was down 2.45 per cent, while Nikkei 225 dropped 0.71 per cent. Strait Times and Taiwan declined 1.24 per cent and 1.37 per cent, respectively.

Back home, despite the broader market weakness metal shares were soon off the blocks, recovering notable ground from the lows of the day. Vedanta advanced 1.20 per cent and the Steel Authority of India (SAIL) was up 0.55 per cent after 30 minutes of the opening bell.

Going ahead, here's an outlook on metal stocks, as they battle the present sell-off:-

Nifty Metal

Likely target: 6,900

Upside potential: 11% 

There is a formation of a “Golden Cross” on the daily chart of the Nifty Metal index. This reflects a build-up of positive sentiment in recent days. And to materialize this positivity, the index requires to breakout above the 6,200 mark. The neckline once broken, could instil additional strength that can drive the index to a new all-time high - up to 11 per cent gains. CLICK HERE FOR THE CHART

Vedanta Ltd (VEDL)

Likely target: Rs 235 and Rs 240

Upside potential:  9.50% and 14%

This is the second time that shares of Vedanta were seen striving to cross the 200-day moving average (DMA) set at Rs 287 level, after slipping to fresh 52-week lows in July this year. If the stock succeeds to conquer the same average with strong volumes, the breakout shall trigger an upside to Rs 235 and Rs 240, which are the next hurdle points. The current attempt points to a higher probability of success, as the Moving Average Convergence Divergence (MACD) has effectively clung over the zero line so far. CLICK HERE FOR THE CHART

Steel Authority of India (SAIL) 

Likely target: 101%

Upside potential:  18%

While shares of SAIL have had a rough time after April 2022, as the stock failed to cross the 200-DMA, the present trend above over the Rs 75 mark, its 100-DMA exhibits a robust momentum that could leap over the 200-DMA set at Rs 86 level. As and when that happens, the stock shall aim at a new 52-week high with its first hurdle seen at Rs 101. CLICK HERE FOR THE CHART

JSW Steel Ltd (JSWSTEEL)

Likely target: Rs 800

Upside potential:  14%

JSW Steel shares did encounter a sell-off near the Golden Cross breakout of Rs 700 level. The current scenario on the daily chart suggests a firm recovery from beneath the 200-DMA placed at Rs 632. The trend looks optimistic with a long green gap-up candle just a few sessions back, which can drive the momentum upwards again. A breakout over Rs 700 could see the counter hitting a new historic peak at Rs 800. CLICK HERE FOR THE CHART

Tata Steel Ltd (TATASTEEL) 

Outlook: Bullish trend lags beneath200-DMA

The current trend in Tata Steel seems to be weighed by a sell-off under the 200-DMA, placed at Rs 107.90. Unless and until this hurdle is not taken out, the weakness could see added interest. The immediate support for the stock is seen at Rs 99.70, its 100-DMA, which needs to be adhered on a closing basis. A breakout over the 200-DMA shall mean a positive upside to Rs 128 level. CLICK HERE FOR THE CHART