Metal stocks shine and lift benchmarks

The Indian key benchmark indices reclaimed all-time high level for the first time after August 9, meanwhile witnessing range-bound volatility. Broader market indices too remained positive where Mid-cap index outperformed gaining more than 1 per cent, while Small-cap index closed marginally up. On the sectoral front, barring Nifty IT which shed 0.9 per cent, all other sectors ended in green, where Nifty Metal index led the move gaining 2.5 per cent on Monday.

In the metal index, Welcorp and National Aluminium were the top gainers with 11.9 and 4.7 per cent gains, respectively. Tata Steel and Vedanta which hold more than 18 per cent weightage in the Nifty Metal index, surged 3.5 and 3 per cent, respectively, lifting the entire index to close in green for the second consecutive day in a row.

Nifty Metal index had hit a Shooting Star at an all-time high of 4,256 on January 15, 2018, after which the index traded down with lower tops. Meanwhile, the index formed Inverse Head & Shoulders multiple times, but failed to give the neckline breakout.

The index had however, breached its multiple point downward sloping trendline breakout near 3,500 levels on August 9, but witnessed a pullback of up to 38.2 per cent retracement of the upward rally from 3,062 to 3,513. The index bounced back and recently broke out of the trendline yet again on closing basis supported by volumes and 14-period RSI positive crossover at 55, currently quoting 59 cuing momentum. The index has breached its 50-day EMA level and has touched the 100-day EMA level. Above 3515-3530, the index looks more promising.