NMDC, part of the industrial minerals space, rose more than 10% in a month and recorded a breakout from a ‘W’-shaped pattern on the weekly charts which suggests that bulls are here to stay. The stock hit a 52-week high of Rs 131 on 13th January 2023 but failed to hold on to the momentum. It found support above Rs 100 level once in May 2023 and then again in June 2023.
The retest of the crucial support placed above Rs 100 resembles a W-shaped pattern or a double bottom pattern on the weekly charts. Short-term traders can look to add or buy the stock on dips for a possible target of Rs 128 in the next 2 months, suggest experts. A W-shaped pattern is formed when there is a fall in stock price followed by a rebound and then another drop to a level that is closer to the low formed initially and then again followed by a rebound.
The neckline of the W-shaped pattern was placed around 110 levels. The stock closed at Rs 112 on 28th July. In terms of price action, the stock is trading well above most of the short- and long-term moving averages of 5,10,30,50,100 and 200-DMA on the daily charts, which is a bullish sign.
The daily Relative Strength Index (RSI) is at 64.1. RSI below 30 is oversold and above 70 is considered overbought, Trendlyne data showed. MACD is above its center and signal Line, this is a bullish indicator.
In a recent market structure, commodities have started to do well, and some traction is observed in the metal and mining space. After the recent underperformance, the metal index has resumed its upside movement. “We like NMDC from metal space.
Since the year 2012, the stock has been trading in a wide range on a monthly scale. In the recent decline, a long-time falling trend line acted as support. It coincides
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