Chart Check: Multibagger in making? SAIL could rally more than 100% in next 12 months

Steel Authority of India (SAIL), part of the iron and steel sector, has rallied more than 30% from June lows, and looking at the technical setup, the rally is not over yet.

Short-term traders who missed the rally since June can look to buy the stock now or on dips for a possible target of Rs 190 in the next 3-4 quarters, suggest experts.

The stock with a market capitalization of more than Rs 35,000 crore hit a fresh 52-week high of Rs 121 on December 13, 2021, but failed to hold on to the momentum.

It bounced back after hitting a low of Rs 63 on June 20, 2022. The stock closed at Rs 85.50 on 11 November which translates into an upside of nearly 35% since then.

On the quarterly charts, the stock retested the falling trendline and then bounced back. It has formed an inside bar in the previous quarter indicating that there is selling exhaustion, suggest experts.

Inside Bar pattern can be both bullish or bearish but is formed after a large move and represent a period of consolidation. A break above the high point of the mother candle of the Inside Bar placed at Rs 85 will put the stock in a higher trajectory.

It can be observed on the quarterly charts of SAIL, that post five quarters of up move with strong volumes (from the levels Rs 20-150 in the period March 2020-June 2021) the stock retraced for four consecutive quarters with low volumes.

The stock saw some selling pressure from the levels of Rs 151-63.50 in the period September 2021-June 2022 which was 61.80% retracement of its previous up move.

In terms of price action, the stock price is trading above the crucial short- and long-term moving averages of 5,10,30,50,100 and 200-DMA which is a positive sign for the bulls.


“This stock retested the falling trend line placed at 67 levels & has formed an inside bar in the previous quarter indicating that there is selling exhaustion,” Sujit Deodhar, Head - Technical Analyst, Wellworth Share & Stock Broking, said.

“A break above Rs 85 level which is the high of the inside bar with Stochastic oscillator (which is a momentum indicator) in oversold zone, triggers a fresh buy in this stock,” he said,

“Traders can use the dips to Rs 75 level to add, for a huge upside target projected at 190 levels for a holding period of next 3-4 quarters with a protected stop loss to placed below Rs 65 level on a daily close basis,” recommends Deodhar.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)