Tata Steel, SAIL: Will metal stocks correct further? Here's what charts say

If Tata Steel's stock does not recover the gap-down range, the downside bias may drag it towards Rs 1040 levels.

The breathtaking rally in metal stocks, ever since the global economies began lifting restrictions amid dip in Covid-19 cases, seems to have hit a temporary blip. Valuations appear stretched for most stocks as the Nifty Metal index has clocked a gigantic 237 per cent rally (since March 2020 lows) on the National Stock Exchange as against a 95 per cent leap in the benchmark Nifty50 index, ACE Equity data show.

The rally in commodity prices, which pushed stock prices higher at the bourses, was driven by quick rise in business confidence to levels higher than pre-pandemic, reflecting the impact of large