Small & Midcap Mantra | Up 100% in a year, this Tata Group company is on track to hit new lifetime highs

The stock price of Tata Metaliks, a Tata Group firm, has risen more than 100 percent over the last year, much ahead of a 49 percent rally in the Nifty in the same period. This year, too, Tata Metaliks has rallied more than 81 percent compared to over 12 percent gains in the Nifty and 17 percent in the S&P BSE 500 Index. After hitting a 52-week high of Rs 1,374 on May 21, the counter has seen consolidation and it is trading above all the crucial long-term moving averages such as 200, 100, and 50-day moving averages. However, the price slipped below the short-term moving average of 5,10 & 20-Days Moving Average which suggests that stock price witnessed profit booking at higher levels, but the long-term trend still remains intact on the upside. According to experts, the technical setup still remains bullish and investors can create long positions or on dips for a target of Rs 1,355-1,370, which translates into an upside of over 20 percent from the July 2 closing price of Rs 1,107 on the BSE. The time horizon should be at least six-nine months.

A subsidiary of Tata Steel, Tata Metaliks has a state-of-the-art manufacturing plant in West Bengal’s  Kharagpur, which produces the finest quality of pig iron and ductile iron pipes in India. The plant's annual hot metal production capacity is 500,000 tonnes, out of which 200,000 tonnes is converted into ductile iron (DI) pipes and 300,000 tonnes into pig iron, the company website says. The metal space has been regaining momentum taking a breather the past couple of weeks. “Within this space, Tata Metaliks has retested its three-year breakout area and formed a higher base on elevated buying demand, thereby offering fresh entry opportunity with a favourable risk-reward for investors,” Dharmesh Shah, Head–Technical, ICICI direct, said. “The stock has witnessed breakout with strong volumes, which are 6x the average 50-day volume of 11 lakhs, signalling strong participation and sustainability of uptrend. Since May 2020, it has held above its 10-week EMA. It has maintained its rhythm during recent consolidation and formed higher base this average,” he said. The stock is expected to head towards Rs 1,370, it is May 2021 high, Shah said.  The stock has immediate support at Rs 1,020, which is the lower band of recent consolidation on a closing basis. Among oscillators, weekly RSI has generated a bullish crossover recently, suggesting positive bias in the coming weeks. Disclaimer:The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.