A Must Include Stock in Your Trade Diary

About the company:

Jindal Steel & Power Ltd (NS:JNSP) is an Indian steel and energy company based in New Delhi. The company is a part of a Rs 130,000 crore diversified O.P. Jindal Group conglomerate. JSPL has interests in steel, power, mining, oil and gas, and infrastructure in India.  The stock is trading at an 11.2% discount to its 52-week high level. The 52-week high and 52-week low range is Rs 502 – Rs 184.

Technical observations:

One week time frame: (Chart 1)

On a weekly time frame, from the below chart, we can see that JSPL stock has broken out of a Falling Channel. The scrip reached its 52-week high in the week of May 10, 2021. Since then, the share has pulled back and has eventually taken support of the 50-day EMA line and bounced back. After breaking out of the Falling Channel, the scrip will most likely make a Bullish Harami formation in the current week. We anticipate the stock to further move upward supported by volume gains. Relative Strength Index (or RSI) is close to 60 and the Moving Average Convergence Divergence (or MACD) line has crossed the signal line from below. It indicates positive momentum on the scrip. Long-term investors should enter at current levels. They should maintain the stop loss at Rs 347 (previous swing low) on a weekly closing basis.

One day time frame: (Chart 2)

On a daily time frame, you should observe from the below chart that JSPL share has made a Large Rounding Bottom formation. On October 26, 2021, the scrip has retested a major resistance level of Rs 445. Note that on October 25, the scrip made a Hammer Candle which was followed by a Bullish Engulfing Candle on October 26. It indicates a high probability of a Bullish Reversal on a daily time frame. We anticipate the share to further move up supported by volume rise. RSI is above 60 indicating positive momentum on the stock. Positional traders should enter at current levels while keeping a stop loss at Rs 404 on a daily closing basis.

Conclusion:

We believe JSPL stock to maintain positive bias and move higher from current levels in the coming sessions. Short-term traders should take a position above Rs 446 level and keep a strict stop loss of Rs 426 on a daily closing basis.