Metals eye up to 15% gain amid China reopening, likely capex push in Budget

Reopening of China’s economy after years of strict Zero-Covid policies may trigger fresh rallies in metal stocks globally.  The policy shift could boost the demand for various assets classes from commodities, equities to currencies. 

Also, as the economy slowly returns to normalcy, the capex push may revive the hope of the slowing economy. 

Meanwhile, over half of the stocks in Nifty Metal Index are trading with a bullish sentiment ahead of Budget 2023, defying vulnerability over the existing volatility. Shares of Hindustan Zinc, Jindal Steel & Power, Jindal Stainless, and APL Apollo Tubes have recently recorded successive peaks. 

Hindustan Zinc, Jindal Stainless and APL Apollo Tubes have registered new all-time highs, while Jindal Steel & Power climbed to a new 52-week mark.

Other stocks on the list, such as Hindalco Industries, Hindustan Copper, Steel Authority of India, and Vedanta have resolutely overpowered their previous resistances to resume the bullish trend. 

While JSW Steel and Tata Steel are rallying in a sluggish pace, the underlying bullishness is still very much intact. 

Broadly, the Nifty Metal Index is well-positioned during the present uncertainty, surrounding the Budget outcome. The index trades near its historic high of 6,919 and has seen accumulation in the last 15 sessions.

Here’s the technical outlook on metal stocks:-
 

Nifty Metal

Likely target: 7,200 (once 6,960 is taken out)

Upside potential: 3.50%

The index is presently trading in a sideways trend, within the range of 6,950 to 6,650 levels. Underlying momentum is revealing a positive bias, as the current high volatility is not letting bears to negate the lower range. A definitive close over 6,950 shall trigger fresh upside in the direction of 7,200. The 21-simple moving average (SMA) is positioned at 6,772-mark, where the index is currently hovering.  CLICK HERE FOR THE CHART

Hindustan Zinc Ltd (HINDZINC)

Likely target: Rs 400

Upside potential:  14%

Hindustan Zinc has seen a vertical spike in the share price since November last year and continues to trade, with a robust bullish sentiment.  The “Higher High, Higher Low” formation has maintained the bulls on upward surge with ease. The trend is expected to see further highs, until the support of Rs 330 is defended on the closing basis. The bullish bias signals a rally to Rs 400 levels.  CLICK HERE FOR THE CHART

Jindal Steel & Power (JINDALSTEL)

Likely target: Rs 650 and Rs 670

Upside potential:  8% - 11%

As long as Jindal Steel & Power shares trade over Rs 570 mark, the bullish trend is expected to reap higher levels in the coming sessions. The trend is headed towards Rs 650 and Rs 670 levels. While there is a divergence on the Relative Strength Index (RSI), the price action is not letting sell-off to dominate. CLICK HERE FOR THE CHART

Hindalco Industries Ltd (Hindalco)

Likely target: Rs 550

Upside potential:  11%

Having the formation that reveals accumulation around crucial supports, the trend is expected to be strong, with up move continue to see higher highs until major shift in the sentiment occurs. This is the case with Hindalco Industries shares, which are trading firmly witnessing accumulation on every healthy dips.  The stock is decisively holding the support of Rs 460 and Rs 475, with Moving Average Convergence Divergence (MACD) riding the momentum upward over the zero line, the stock is expected to move in the direction of Rs 550. CLICK HERE FOR THE CHART

Tata Steel Ltd (TATASTEEL) 

Likely target: Rs 140

Upside potential:  15%

There is a “Golden Cross” breakout of 50-day moving average (DMA), 100-DMA with 200-DMA, on the daily chart of Tata Steel. This denotes a bullish trend, with price action expected to see higher levels in the coming sessions. Until the support of Rs 115 is protected on the closing basis, the momentum is directed towards Rs 140. The candlestick formations are aligned to the bullish bias, as every weakness has seen sharp reversal on intraday scales. CLICK HERE FOR THE CHART