Nifty Metal bounces back from its 200-DMA!
On Tuesday, the Nifty Metal index has bounced back sharply from its 200-DMA and has soared nearly 1.5% from the key indicator.
The Nifty Metal Index is designed to reflect the behaviour and performance of the Metals sector. The index comprises of maximum 15 stocks listed on the National Stock Exchange (NSE). Tata Steel, Hindalco and JSW Steel comprise over 50% of weightage in the index. Interestingly, these stocks have witnessed strong buying at their lower levels, thus propelling the index higher.
On Tuesday, the Nifty Metal index has bounced back sharply from its 200-DMA and has soared nearly 1.5% from the key indicator. The Indian indices opened with a huge gap-down amid bad global cues. Nifty Metal opened at around its 200-DMA. In the first few minutes, the index was seen under pressure and hit the day’s low at 5477.50. However, a superb recovery saw the index gain about 131 points from its day’s low. The 200-DMA indicator lies at 5539, and the index has seen good support at this level.
On the technical chart, the index has formed a strong bullish candle with a long lower shadow, demonstrating buying interest at lower levels. The index was under an aggravated sell-off from the past few days, and today’s candle might bring some stability to the index. The technical parameters are neutral to bearish and do not suggest any fresh entry.
A good point to note is that the index has found 200-DMA to be strong support. Thus, any bullish candles shall be treated with positivity. Investors and traders need to wait for further clarity. The index has generated better performance against Nifty on a YTD basis. It has risen by nearly 2% against negative 2% of the benchmark index.
The geopolitical tensions in eastern Europe have created volatility in the market. Thus, it would be a wise decision to wait for some stability in the market.
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