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NIFTY METAL: The Index needs to show stability above 100-DMA

The index struggled to conquer 5,900 levels decisively, which resulted in a breach of 50-day moving average (DMA) and 100-DMA supports, according to the daily chart. The 50-DMA and 100-DMA are placed at 5,586 and 5,380 respectively. To build a positive momentum ahead, the index needs to cross and show stability above 100-DMA. When that happens, one can expect a recovery towards 50-DMA. On the flip side, if the index stays below 100-DMA, the negative sentiment may see an accelerated weakness towards 5,000 levels.

1. TATA STEEL LTD

The gap-down closing on 28 August 2021 has dismantled the positive bias as the stock failed to recover. The growing weakness led to a breach of the support at Rs 1,380-level, which is the 50-DMA.

2. JSW STEEL Ltd

Likely target: Rs 600

Downside potential: 7%

A clear breakdown of the “Ascending Triangle” hints a downside towards Rs 600 level. The current weakness is supported by strong volumes indicating aggressive selling pressure.

3. VEDANTA LTD

Likely target: Rs 300

Upside potential: 4%

The stock has held the support of 100-DMA since November 2020 and as long as the MACD stays above the zero lines, some reversal may emerge towards Rs 300 level, according to the daily chart. The 100-DMA is currently placed at Rs 281.80. The next crucial resistance is at Rs 311, where the stock may rally if it absorbs the selling pressure at Rs 300-level.

4. STEEL AUTHORITY OF INDIA

Likely target: Rs 99

Downside potential: 8%

STEEL AUTHORITY OF INDIA has entered the oversold territory of Relative Strength Index (RSI); the momentum and direction have not been able to see any major recovery. This scenario reflects weakness and possible downward movement, that may re-test the support of 200-DMA set at Rs 99 level, according to the daily chart.