Metals stocks are starting on a rusty note. Is the rally over?
Metals stocks have started on a rusty note this week as 12 out of 15 stocks are trading in the red at the time of writing.
Leaders Tata Steel, JSW Steel, SAIL and NMDC hit new 52-week lows as the government levied export duties on some steel products.
Is the metals rally over?
The metals sector was the best performing sector index in 2021, gaining 70%. So far in 2022, the index is down 4% (YoY) and 16% in the month of May 2022.
The rally does not appear to be over yet as it is trading at the do-or-die level of 5,200.
At the beginning of April 2022, I recorded a video on the Nifty Metal index and commodity prices, in which I indicated that the rally was not over yet.
An increase in export duties can have a short-term impact on steel inventories which are down more than 10%.
Bulls can only be at risk on a weekly close below 5090 as we see multiple bottoms in the 5170-5300 range.
At present, the Nifty Metal Index is trading down 6.3% at 5,340 levels. According to the index, Jindal Steel, Tata Steel and JSW Steel are the biggest losers, falling by more than 10%.
Meanwhile, Ratnamani Metals and APL Apollo Tubes defy market trends and trade up 1%.
I will share more about her trend on my Telegram group. If you want to be part of my charting journey as I share how to build wealth from profitable trade setups, join my telegram channel – Fast Profits Daily.
Disclaimer: This article is provided for informational purposes only. This is not a stock recommendation and should not be treated as such.
(This article is syndicated from equitymaster.com)