Will metal counters shine going ahead? Here’s what Rajesh Palviya has to say

“Nykaa is not looking that great on the technical front. Till it does not cross about 240 levels, we feel that some supply pressure is likely to remain on the higher side,” says Rajesh Palviya, VP - Technical and Derivative Research, Axis Securities. Edited excerpts.

In the market rally we are seeing now, is it that some of the laggards when it comes to sectors like Nifty IT have started participating? Even Nifty metal has been lagging behind, do you expect the metal counters to shine going ahead?
Definitely yes we have witnessed strong buying action in the last couple of weeks in the metal space and looking at the sector for Nifty metal we feel that furthermore upward momentum is likely to continue. Stocks like JSW Steel, Jindal Steel, Tata Steel have done well in the last couple of weeks and looking at the set up we believe that another 4% to 5% rally we can witness in the coming trading session in continuation of this momentum for the metal space. So we are bullish and we feel that one can carry the trades for another 4% to 5% up move in the metal space.

A good week for all these beaten down counters especially if we talk about Zomato, back to its October high levels. I just wanted to understand what is your take on Nykaa as well as Zomato going ahead? Do you expect this positive momentum to continue?
So if we talk about Zomato, yes after a big correction, now the stock is forming a base and for the last couple of weeks, especially the last three-four weeks, we have seen a very narrow price action and now the price action is suggesting breakout of that consolidation range. So looking at the short-term setup, we feel that furthermore upward momentum can be seen becoming weak in Zomato. And if it continues to hold about 68 levels, possibly the next target for Zomato should be around 80-84 levels on the higher side. So we feel that this momentum is likely to continue.

If you talk about Nykaa, after the move witnessed in the last two weeks following a big corrective action, the stock has settled down. It is not looking that great on the technical front. Till it does not cross about 240 levels, we feel that some supply pressure is likely to remain on the higher side. Once the stocks manage to cross about 240 levels on the weekly closing basis, possibly the stock can attract some more buying action above 240 levels. But, till the time stock does not cross about 240 level, short-term traders or investors can take this opportunity to exit, if they have bought at the lower levels.