Jindal Steel & Power Amassed 7% Growth In Four Consecutive Sessions!

During the midweek trading session, the Nifty index began positively and traded within a range throughout the day, currently hovering just below its all-time high level. Notably, some metal stocks displayed relative strength, with one particular stock capturing the attention of investors due to a significant technical breakout after a consolidation period lasting over 111 days. This stock has surged nearly 7% in the past four consecutive sessions, surpassing the average trading volume of the last 20 sessions.

The focus is on Jindal Steel & Power Ltd, a company engaged in the manufacturing of iron and steel products and power generation. It operates across various business segments, including Iron and Steel Products, Power, and Others. The Iron and Steel Products segment encompasses the manufacturing of steel products, sponge iron, pellets, and castings, while the Power segment focuses on power generation. The Others segment primarily involves aviation, machinery division, and real estate. The company was founded by Om Parkash Jindal on September 28, 1979, and is headquartered in New Delhi, India. 

Since reaching its high of Rs 622.75 on Budget Day in February 2023, the stock has been consolidating within a wide range of Rs 622.75 on the upper side and Rs 503 on the lower side. Interestingly, the lower end of this consolidation range aligns with a retracement support level of over 38.2% from the last impressive rally that began on June 21, 2022, at the Rs 304.20 level, as seen on the daily chart. In the most recent trading session, the stock witnessed strong buying interest, resulting in an upward movement from the support of the 5-day moving average (5DMA). 

By drawing a trendline connecting the highs of January 13, 2023 (Rs 612.80 level) and June 20, 2023 (Rs 604.50 level), we can identify a breakout trendline representing a continuation pattern known as the Bullish Up Flag Pattern. Interestingly, in the last trading session, the stock broke through this trendline and closed above it on the daily chart, signalling a breakout of this pattern. This breakout suggests that the stock could potentially rise to Rs 760, representing a gain of around 20% from the breakout level (Rs 604 level).