Metal frontliners lead Metal index breakout

Nifty Metal index witnesses downward sloping channel pattern breakout initiated on October 19, 2017. Nifty Metal frontliners have given breakouts on daily basis on Friday, after witnessing consolidation at lower levels. Over 5 per cent surge in Vedanta Limited which holds 18 per cent plus weightage in the Nifty Metal pulled the index up to trade with 2.6 per cent gains. Secondly, Hindalco which holds 15 per cent weightage surged 2.5 per cent. Overall, the index which has been underperforming the benchmark indices for most of the sessions, ultimately witnessed a breakout at 3660.

After resisting at 3699 levels on December 2017, the index witnessed subdued movement for next two trading sessions. On Friday, the index gave a gap-up opening of 35 points and gave gradual upbeat throughout the day. The 14-period RSI positive crossover just above the overbought zone and MACD recovery in the below 0 zone itself suggest momentum, going forward. The index has also breached its 20-days EMA resistance at 3665 levels and is on the verge of giving 50-days EMA breakout at 3688 levels.