Nifty Metal index registered a strong breakout from the three-month high base formed around the 100-day EMA, highlighting the strong price structure. Therefore, it provides a fresh entry opportunity to ride the next move, ICICI Securities said in a note.
Going forward, the brokerage expects the Nifty Metal index to outperform the expected benchmark and challenge the 52-week high in the coming months. It has recommended two metal stocks because lifts up – Tata Steel and Graphite India, with a time frame of three months.
Tata Steel: The stock has generated a breakout above the declining channel of the last six months of a corrective decline, which signals a resumption of the upward move and provides a new entry opportunity. The stock has seen a shallow retracement in the last six months. Thus, ICICI Securities expects Tata Group shares to maintain a positive bias and move ahead 1,390 levels (target price).
Graphite India: “The stock is seeing buying demand from the key support area of 430-470 as it is a confluence of rising demand line and rise in 50 month average since March 2020. Thus, it provides a fresh entry opportunity with a favorable risk reward,” the brokerage note said. 618 levels.
Graphite India is a leading Indian producer of graphite electrodes with a manufacturing capacity of 98,000 tonnes per annum spread across three plants at Durgapur and Nashik in India and Nuremberg in Germany.
While GIL manufactures a full range of graphite electrodes, it remains focused on high margin, large diameter, ultra-high power (UHP) electrodes. ICICI Securities said increase in government spending on Indian infrastructure and announcement of revival of key sectors such as construction, mining, capital goods and automobiles could have a positive impact on steel production and electrode demand.
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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