Metal Sector Analysis – K Karthik Raja Rupeedesk Share Market Training- 01.03.2025
Metal Sector Analysis – K Karthik Raja Rupeedesk Share Market Training- 01.03.2025
Metal Sector Analysis – K Karthik Raja Rupeedesk Share Market Training- 01.03.2025
NIFTY METAL Analysis
By K Karthik Raja
Key Factors Affecting & Reasons
1. Global Commodity Prices – Metal stocks are highly correlated with international commodity price trends, including steel, aluminum, and copper.
2. Demand from China – As the largest consumer of metals, China’s economic policies, infrastructure growth, and production levels impact Indian metal stocks.
3. Domestic Infrastructure & Industrial Growth – Government initiatives, such as PLI schemes, urbanization, and infrastructure spending, drive demand for metals.
4. Supply Constraints & Raw Material Costs – Higher costs of iron ore, coking coal, and other raw materials can affect profit margins for metal companies.
5. Currency Fluctuations – A weaker rupee can benefit exporters but increase import costs for raw materials, impacting profitability.
Key Watch
- Support Levels: 8000-8200 is a crucial zone; a breakdown could lead to further correction.
- Resistance Levels: 9000-9500 needs to be reclaimed for a bullish reversal.
- Moving Averages:
- 50-day MA (9162.37): Price is below this, indicating short-term weakness.
- 200-day MA (6876.05): Still holding above this, long-term trend remains intact.
Volume Analysis
- Selling Pressure: Recent sell-offs indicate strong profit booking at higher levels.
- Institutional Activity: FIIs/DIIs reducing exposure to cyclicals could be driving weakness.
- Reversal Signs: A spike in buying volume near support zones may indicate trend reversal.
Chart Analysis & Observations
- RSI (41.42): Approaching oversold levels but not yet in a strong reversal zone.
- MACD: Bearish crossover suggests continued weakness in the short term.
- ADX (22.72): Trend strength is weakening; consolidation or further downside possible.
Stocks to Watch
- Tata Steel, JSW Steel, Hindalco, Vedanta – Watch for buying signals near support.
- Midcap Metal Stocks – Volatility expected; look for accumulation zones.
Market Insights
Short-Term View:
- Bearish to Neutral unless price holds above the 8200 support level.
- A breakdown could push prices toward the 8000 zone.
Long-Term View:
- Bullish Above 200-Day MA (6876.05): The long-term uptrend remains intact above this level.
- Reclaiming the 50-day MA (9162.37) is needed for a fresh rally.
Conclusion
- Near-term: Selling pressure continues; need signs of stability before a rebound.
- Long-term: Still bullish, but short-term corrections are in play.
- Key Levels to Watch: 8200 support, 9000 resistance.
Disclaimer: Informational purposes only, not financial advice. Do your own research.
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