PSU Stock: Chart Check: Down 37% from August 2021 highs! This PSU stock shows signs of rallying as bulls take control

NMDC, an Indian government-owned company, could be down around 37% from its 52-week high, but recent price action suggests that the bulls are slowly taking control and short-term traders may look to buy the declining stock. is India’s largest producer of iron ore. It is involved in the exploration of iron ore, copper, rock phosphate, limestone, dolomite and gypsum, among others.

The stock rose more than 5% in a week, which helped the stock climb above the 50-DMA on the daily charts, and the Supertrend indicator also signaled a buy.

PSU stock with a market capitalization of over Rs 33,000 crore hit a 52-week high of Rs 181 on August 6, 2021, but it failed to maintain momentum. It closed at Rs 113 on August 8, 2022, which translates to a decline of more than 37%.

The share price started its downward trend from Rs 175 recorded in April 2022, with formations of lower highs and lower lows, which is a bearish sign.

So far in 2022, the stock has recorded a series of low highs and higher highs. It hit a low of Rs 99 on July 15, 2022, before bouncing back. The stock’s rise is also accompanied by strong volumes, which is a bullish sign.

“The stock has formed successive lows in its corrective bullish move, supported by volumes. A daily bullish candle, supported by above-average volumes, has formed above the Keltner channel which itself has started to increase,” said Bharat Gala, President – ​​Technical Research, Securities.

The Keltner channel and Supertrend indicators allow investors to identify trends and generate buy or sell signals.

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On the price front, the action is trading above the short-term moving averages such as 5,10,20,30,50-DMA but below the 100 and 200-DMA.

The stock had been trading in a 10-point range of Rs 100-110 since July. Now, a new recent high of Rs 112.40 is hit by the stock above the accumulation zone previous to the high of Rs 111.4 recorded on July 5, 2022.

“The KST, Vortex and CCI indicators have generated an indication of a possibility of corrective upward movement,” Gala points out.

The Vortex indicator captures positive and negative trend movements, the CCI indicator is used to identify a new trend and it measures the current price level against an average price level of the look-back period.

“Supply appears to be exhausted and the stock may give a corrective move higher. Possible targets are Rs 118-128-137-145. If the stock price corrects lower, buy levels are Rs 107-103. A stop loss to observe in the trade is Rs 98,” Gala recommends.

(Disclaimer: The recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

Karen J. Nelson