These 3 NSE Metal stocks can extend gains amid China stimulus; hint charts

Hindalco, SAIL and Hindustan Copper seem to be favourably placed on the technical charts and can potentially rally up to 13 per cent from present levels; check key support and resistance levels here.

The NSE Nifty Metal index stood tall in an otherwise weak market on Monday, gaining as much as 1.6 per cent at 10,225 in intra-day deals. Meanwhile, the NSE Nifty 50 index had shed 1.3 per cent or 330 points at 25,850 levels.

Today's up move in the metal stocks was attributed to reports of a revival push for Chinese economy. The People's Bank of China (PBOC), on Sunday, asked commercial banks in China to reduce interest rates on existing mortgages at least 30 basis points (bps) below the Loan Prime Rate (LPR), in batches. It is anticipated that existing mortgage rates will be cut by around 50 bps on average. In China, the Shanghai Composite index soared nearly 6 per cent on Monday.

PBOC move comes after the US Federal Reserve cut interest rates by a massive 50 bps, on September 24. The China's central Bank had followed suit and lowered the 14-day reverse repo rate by 10 bps to 1.85 per cent. READ MORE

Here's how the Nifty Metal and its few key components are placed on the technical charts:

Nifty Metal Index Outlook

Current Level: 10,225

Upside Potential: 7.4%

Support: 10,100; 10,000; 9,750

Resistance: 10,300; 10,730

The NSE Nifty Metal index has rallied 8.5 per cent in the last five trading sessions post breakout above its 100-DMA (Daily Moving Average). The near-term bias for the Nifty Metal index is likely to remain upbeat as long as the index sustains above 10,100 levels. CLICK HERE FOR THE CHART

On the upside, the NSE Metal index can potentially rally to 10,985 levels, with interim resistance seen at 10,300 and 10,730 levels. On the other hand, in case, support at 10,100 is broken, the index could seek support around the 10,000-mark and 9,750 levels. The overall bias is likely to remain positive as long as the index holds above 9,600. 

Outlook on key metal stocks

Hindalco

Current Price: Rs 755

Upside Potential: 9.7%

Support: Rs 744

Resistance: Rs 774

Hindalco is seen trading above the higher-end of the Bollinger Bands on the daily scale. The near-term bias for the stock is likely to remain positive as long as the stock holds above Rs 744. On the upside, the stock can potentially rally to Rs 828; with interim resistance seen at Rs 783 and Rs 800. On the downside, break of Rs 744 could see the stock dip to Rs 725 levels. CLICK HERE FOR THE CHART

Hindustan Copper

Current Price: Rs 342

Upside Potential: 12.6%

Support: Rs 328

Resistance: Rs 361

Hindustan Copper last week gave a breakout above its 20-WMA (Weekly Moving Average) after 13 weeks. The near-term bias for the stock is likely to remain positive as long as the stock holds above Rs 328. On the upside, near resistance for the stock is seen at Rs 361 above which a rally towards Rs 385 levels seems likely. CLICK HERE FOR THE CHART

JSW Steel

Current Price: Rs 1,028

Upside Potential: 7%

Support: Rs 1,006; Rs 995; Rs 980

Resistance: Rs 1,053; Rs 1,070

JSW Steel is on the verge of giving a breakout on the long-term chart. At present, the stock is seen trading above the higher-end of the Bollinger Bands on the monthly scale. A close above Rs 1,006 could confirm the breakout. As such, the near-term bias shall remain positive as long as the stock holds above Rs 1,006. CLICK HERE FOR THE CHART

On the upside, the stock can attempt a rally towards Rs 1,100; with interim resistance likely around Rs 1,053 and Rs 1,070. On the flip side, break and sustained trade below Rs 1,006 could trigger a price correction for JSW Steel towards Rs 996 - Rs 980 levels.