The Rocks Are Rocking

JC Parets
March 2, 2022

Over the last few weeks and months, the market has been messier than before. With so much going around, the most valuable thing we like to do is follow the price action.

The beginning of this week started with great strength coming through from the Metal stocks and we're here to highlight just that today.

Read on to know if your favourite stock made it to the list!

Metals, and here I mean base metals, have been doing the bulk of the lifting with Equity and Currencies moving sideways. Commodities have been showing a clear path of trend and have been the more profitable area to be invested in.

Take a look at our custom Equally weighted base metals chart below. Bottom left to top right. That's the signature of any good trend in a market. And this chart is doing just that.

Click on the chart to zoom in.

Let's take a look at what the metals sector is looking like.

This is the Nifty Metal monthly chart. Notice how the price has been moving sideways for close to eight months now. But what is also important to notice is that the price closed at the highest level since this sideways consolidation. Will the price follow through on this 15-year base breakout? Well, that's for us to wait and watch, but there are certainly stock-specific names that seem to believe so. Let's take a look at these stocks.

 

First up, is the leader of the pack Tata Steel. The price had rolled over from higher levels close to 1,600 and has been consolidating above the support level of 1,050. With the price now bouncing back from the same levels, the stock seems ready for its next attempt to move higher.

The positive here is that the price did not slide below the long-term support level post the big base breakout.

We are bullish above the level of 1,050 with a target close to 1,610.

Next up is a name that has come up in our Trade of the Week recently - National Aluminum.

The price has moved past the level of 120, which has a significantly high market memory going back 15 years! If the price manages to stay above this level successfully, 140 will be on the cards pretty soon! Note that these are monthly charts, and are long-term trends that we are discussing. So this may be a longer play if the trend remains in place.

GMDC is another stock that stands out on the monthly charts. The price has been in a strong up-trend for a few weeks now. Going by the strength and momentum in place, the price looks ready for the next leg of the rally.

We are bullish above the risk management level of 115, with a target close to 180.

Ratnamani Metals & Tubes has been one of those 'slow and steady' performers for years now. One of the cleanest structural bullish charts out there, Ratnamani has been holding on to a crucial level. With the market moving sideways, the price moved sideways as well but maintained its position above the level of 1,865.

Now with Metals taking the driver's seat again, Ratnamani is bullish above the level of 1,865. The next target to track would be close to 3,000.

APL Apollo Tubes was one of the metal names that experienced an explosive rally post the 2020 correction. The price has been consolidating above its support zone near 760. While the momentum indicator is yet to move into positive territory, the relative strength here is picking up. And that is why this stock showed up on our list.

We are bullish above the level of 760 with a target close to 1,165.

This was a round-up of the Metals sector which has been outperforming the market in the recent move. If the commodity supercycle we've been talking about does play out, Metals could surely be the ones charging forward!

What are your thoughts? Did your metal stock make it to this list?

Thanks for reading and please let us know if you have any questions.

Allstarcharts Team

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