Short Jindal Steel & Power at current levels: Agarwal

Shubham Agarwal, CMT & AVP- Sr. Technical Analyst, Motilal Oswal advice traders to short Jindal Steel & Power at current levels.

Agarwal told CNBC-TV18, “If you look at the long-term setup of Jindal Steel & Power (JSPL), even CNX-metals that is something which is placed very crucially. It is around the resistance of around 2800-2900 band. We feel that the upswing that has happened in the market metals can still continue to underperform. Initial rally what we saw was just a short covering. After that if you see the metal stocks like Tata Steel and SAIL that has been relatively moving very much sideways and the market have been moving higher.”
He further added, “What we feel is that in the longer run metals can continue to underperform. Individually if you look at JSPL, there was a very long-term support area which was there at Rs 425-450 where the stock was holding on for a very long time. It made multiple bottoms around that area, but later on that support area was taken out. It went to a low of around Rs 320-325 on that. What we have just now is the reversal to that point. So we are already in the band of Rs 425-450 and what we can see yesterday that happened was a bearish engulfing pattern on that stock which is indicating that the resistance of Rs 450 can hold on. So I think people with a longer term perspective can look to exit that stock or even look to go short at the current level. A stop loss for the trade can be kept at Rs 460. We are looking for that support area of Rs 325 which was the recent swing lower to come back again.” Disclosure: I don’t have any personal holdings. We might have recommended some of the stocks to our clients.