One sector with 3 large-cap stocks breaking out on charts

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Subscribe to enjoy similar stories. The Indian stock markets are hitting new highs regularly. Instead of feeling overwhelmed, investors should concentrate on the real challenge: choosing the right sectors and stocks to take advantage of this momentum.

Currently, the spotlight is on metal stocks that are showing upward trends. Let's start by analyzing the Nifty Metal Index, which has emerged as the frontrunner. The Nifty Metal Index has staged an impressive breakout on the 0.25% X 3 daily point & figure (P&F) chart.

This breakout from a four-column triangle pattern marks the end of a prolonged consolidation phase, signalling a robust bullish shift. What is a P&F chart? A point-and-figure chart uses X to denote bullish moves, while O denotes bearish moves. Unlike traditional time-based charts, P&F charts focus solely on price changes and are considered "noiseless".

They filter out minor price fluctuations, highlighting significant trends and reversals. The lack of time constraints gives a clearer picture of supply and demand dynamics, helping chartists make more informed decisions. With this breakout, the index is on track to challenge its previous all-time high of 10,195.

A successful breach of this level could set the stage for a further rally, potentially driving the index up by an additional 12-15%. The bullish trend in the Nifty Metal Index paves the way for large-cap metal stocks to continue their upward trajectory. Let us analyse three of the major players—Hindalco, Vedanta and Tata Steel—that are likely to fuel the index’s rise.