This stock from the Nifty Metal index offers swing trading opportunity; watch out

On Thursday, Nifty Metal index ended the day with gains of 0.35%.

On the daily chart, it has formed an inside bar as the price traded within the high low of a prior trading session. One of the stocks which has caught the attention of market participants from the Nifty Metal index is JSW Steel.

Stock in focus 

The stock of JSW Steel closed with modest gains of 0.19% on Thursday, however, it ended significantly lower from the day's high as it shed almost 13 points from the day's high to end near the lows of the day. With this, the stock has closed near the crucial parallel support. It formed a gravestone doji candle and an inside bar as well as price traded within the high and low range of the prior trading session range. The stock is trading below the all-moving average. The moving average ribbon is in a downtrend. It is trading 2.57% below the 20DMA and 4.93% below the 50DMA. The 20DMA is on a downward trajectory. The MACD shows an increased bearish momentum.

Stock movement 

For the last three days, the volumes have been higher. The 14-period daily RSI is about to enter the bearish zone. The Elder impulse system has formed three consecutive strong bearish bars. The RRG RS and Momentum lines are below 100, showing weakness compared to the broader market. The KST and TSI indicators have given fresh bearish signals, while the stock has declined below the Anchored VWAP support. In short, the stock is exhibiting a bearish bias and it is on the verge of registering a downside breakout.

Going forward, a move below Rs 695 would confirm the downside breakout and in the short term it can test the level of Rs 679. Traders can maintain a stop loss at the level of Rs 714. Below the level of Rs 679, continue with a trailing stop loss.