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Seize this trading opportunity in a commodity PSU share

By on December 24, 2021 0

About the company:

The Metals and Minerals Trading Corporation of India (or MMTC (NS :)) exports minerals and imports precious metals, non-ferrous metals, fertilizers, food products, coal and hydrocarbons, etc. MMTC is one of the two main sources of foreign exchange. for India and India’s largest public sector trade body. The stock is trading at a discount of 26.56% from its 52 week high. The high range over 52 weeks and low over 52 weeks is Rs 64 to Rs 21.60.

Technical remarks:

One week delay: (Graph 1)

Over a weekly period, from the chart below, we can see that the MMTC stock has come out of a long term bullish flag pattern. The stock appears to have taken capable support on the 50-day EMA line. It is also testing a significant resistance level of Rs 48. Once the script breaks through this level we will see more bullish movement. The breakout should be supported by higher volumes. The Relative Strength Index (or RSI) is above 55 and the Moving Average Convergence Divergence Line (or MACD) is crossing the signal line from below. This indicates positive momentum on the stock. Long term investors can enter at the current level. They should keep the stop loss at Rs 38.

One-day delay: (Graph 2)

On a daily period, you should note from the chart below that the MMTC stock has made a rounded bottom formation. A significant resistance level remains at Rs 47. We can also see that due to the recent upward movement the script broke through the 50 day EMA from the bottom. We expect the script to break through this level through increased volumes. The RSI is above 60 and the MACD line has crossed the signal line. It denotes a positive dynamic on the action. Position traders can enter the current level. The stop-loss should be maintained at Rs 39 on a daily close basis.

MMTC2

Conclusion:

We expect the MMTC script to maintain a positive bias and move north from current levels. Short term investors can enter at the current level. However, they should maintain a strict stop loss at Rs 43 on a daily close basis.


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