Nifty Metal
The Nifty index of metal stocks is at its multi-year support level and has bounced from the bottom of its supply zone. The same support was seen in 2016 and the index rallied from 1900 to 4255 almost 125% return in the index itself. The world economy will soon recover from the corona crisis and the index shall boom again. This is the best opportunity for long-term investors to buy a metal basket and within 3-4 years the basket can give multi-bagger returns.
Hindalco Industries
Here, we can see a chart similar to that of Nifty metal. The stock rallied from Rs. 60 in 2016 to Rs. 280 in 2018.
Explanation
The stock was at a multi-year support level in 2016 and was having a resistance of 2 trendlines indicated in the chart as 'past scenario'. A similar pattern is seen now i.e. the stock is again trading at a multi-year support level and has a similar resistance level. As we mentioned in our earlier blog post that Technical Analysis is based on the principle "History repeats itself", we may again see the multi-bagger performance from this stock and must be added in the metal basket.
Investment pattern
As per the current economic scenario, it may again retest the lower price levels but long-term investors can add 50% of the total allocation to be done in the script at the Fibonacci level of 108 and shall add more either on confirmation at upper levels or at the lower price levels (i.e. multi-year support)
Vedanta Ltd., Tata Steel and JSW Steel
All these stocks have also provided handsome returns in the rally of 2016-2018 and are also forming the same chart patterns as Nifty Metal and Hindalco Industries as explained above. All the stocks in the index and the index itself are bullish from the current levels. The basket of the given stocks shall be added in the portfolio for multiple returns. The investment pattern provided for Hindalco Industries must be followed similarly in all these scripts.
Stay tuned for more such updates!
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