The metals sector which has long been preparing itself for this move seems to be fully prepared to go full-out and perform itself in the April series.
Vishal B Malkan
The April series seems to have opened with a huge bout of positivity. With Nifty closer to its previous highs and Bank Nifty venturing out into an unchartered territory, the bulls have all the reasons to be optimistic about the current market scenario.
One sector that is poised to take full advantage of this positivity is metals. The sector which has long been preparing itself for this move seems to be fully prepared to go full-out and perform itself in the April series. The fact that it closed with a big white candle pattern on the first day of April series, with a good amount of long positions built up, is indicative of a strong move to be anticipated in this sector.
In the monthly chart of Nifty Metals shown below, notice the hammer candle pattern marked in the blue arrow which falls at 50 percent Fibonacci retracement level.
Nifty Metals – Monthly Chart
Most stocks in the sector too show similar patterns.Vedanta– The momentum indicator – RSI – has moved into its bullish zone after staying into the negative/sideways zone for more than two years. This indicates the onset of a long-term shift in trend in this stock, to the upside.
Vedanta Ltd – Daily Chart
SAIL – After making multiple lows below the 40-level, the RSI in the monthly chart of SAIL below has now taken support at that level, forming a higher bottom at the same time. This is followed by a bullish candle pattern, as marked in the chart below. The April series in SAIL too seems to be interesting, considering that the support may do its job.
SAIL – Monthly Chart
Jindal Steel & Power – The price breakout with the big white candle pattern in the daily chart below has moved above the 38 percent Fibonacci retracement level. The stock seems perfectly poised to move to its previous high Rs 200 level.
Jindal Steel & Power Ltd – Daily Chart
Considering the charts of the Index along with its components, there is a strong possibility of the April series closing strong.
(The author is Founder of MalkansView)Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.