BackThis Rakesh Jhunjhunwala portfolio: Experts see 'breakdown' in this new stock
Rakesh Jhunjhunwala portfolio: The Nifty metal index is trying to create a double top formation around 5900 level with negative divergence in momentum indicators that may lead to short term correction in the metal stocks, say experts
PremiumRakesh Jhunjhunwala portfolio: In April to June 2021 quarter, Big Bull Rakesh Jhunjhunwala added three stocks in his portfolio. Steel Authority of India (SAIL) shares were one of them. This metal stock has been under selloff pressure for the last one month and expecting weakness in the NSE Nifty metal index, stock market experts are seeing 'breakdown' in this Rakesh Jhunjhunwala stock at ₹115 per stock levels. They said that after this breakdown, SAIL share price may go up to ₹80 to ₹85 levels in next one month. They advised investors to buy at around ₹85 levels for long-term as strong bounce back is expected in the PSU counter after this expected correction.
Expecting breakdown in this Rakesh Jhunjhunwala portfolio stock; Santosh Meena, Head of Research at Swastika Investmart Ltd said, "The Nifty metal index is trying to create a double top formation around 5900 level with negative divergence in momentum indicators that may lead to short term correction in the metal stocks. If we talk about individual stocks then SAIL and JSW steel are underperforming metal stocks. They are vulnerable for an immediate correction as they are likely to breakdown their neckline support levels following a double top formation." Meena went on to add that China may release more metal reserves to ease supply shortage that could be a key trigger for a near-term correction.
Unveiling important levels in regard to this Rakesh Jhunjhunwala stock; Santosh Meena of Swastika Investmart said, "SAIL is consolidating in ₹125 to ₹115 band with relative weakness to metal index where any decisive move below ₹115 mark can lead to selling pressure towards its 200-DMA, which is currently placed around ₹100 mark while ₹85 to ₹80 will be a critical demand zone at any meaningful correction and that will be a great buying opportunity as long term trend is still bullish for this counter."
Highlighting fundamentals that may support SAIL share price once the Nifty metal index gets stablised; Rahul Sharma, Co-Founder at Equity99 said, "SAIL has ROCE of 11.2 per cent and ROE of 9.51 per cent. The public sector company has delivered PAT growth of 169 per cent over last 3 years. Company has reduced its debt by 30 per cent and plans to bring down borrowings to ₹20,000 crore. Also SAIL has plans of making ₹4000 crore investment in Jharkhand to augment Gua mines capacity."
Speaking on SAIL share price targets post-correction; Santosh Meena of Swastika Investmart said, "On the upside, ₹125 is an immediate and critical resistance that coincides with a cluster of 50 & 100-DMA while a move above ₹125 may reject a short-term bearish stance and stock may head towards ₹140 mark."
Asking investors to take long position in this Rakesh Jhunjhunwala stock; Rahul Sharma of Equity99 said, "We expect SAIL share price to go up to ₹185 apiece in 6 to 9 months time-horizon."
Rakesh Jhunjhunwala holding in SAIL
As per the shareholding pattern of SAIL for April to June 2021 period, Big Bull Rakesh Jhunjhunwala bought 5.75 crore SAIL shares, which is around 1.39 per cent of the net company shares.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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