In the preceding year, India's metal industry outperformed every other sector. In an effort to comprehend the Indian metal business, let's take a look back at the various NIFTY Metal index components.
The NIFTY Metal Index, as its name suggests, is an index created to reflect the actions and results of India's metals industry. It is one of the NSE's NIFTY Sectoral Indices. Investors use it as a significant benchmark.
What Is the Nifty Metal Index?
The NIFTY Metal Index was created to reflect the actions and results of the metals industry, which includes mining. A maximum of 15 stocks listed on the National Stock Exchange, or NSE, make up the NIFTY Metal Index. The level of the NIFTY Metal Index indicates the total free float market value of all the companies included in the index in relation to a specific base market capitalization value. This index is calculated using the free float market capitalization method.
The NIFTY Metal Index is useful for several things, including creating index funds, ETFs, and structured products as well as benchmarking fund portfolios.
In essence, a weighted average of the 15 businesses that make up NIFTY Metal is calculated depending on the size of the companies being traded as determined by their free float market capitalization. The term "free float" describes the number of shares that are easily traded; it does not include locked-in shares or shares that are difficult to trade, such as shares pledged by promoters, etc.
How to buy Nifty Metal Index?
The simplest method to put money aside while you are busy with life and have it work for you is through investing. You must - in order to invest in Nifty 50 stocks.
Step 1: Select a reputable broker
Step 2: Create a Demat account online
Step 3: Deposit enough money in your Demat account
Step 4: Purchasing Nifty Metal stocks can be done in one of three ways:
- Purchase stocks at a rate equal to their weight in the Nifty Metal Index.
- Purchase any specific stock or collection of stocks based on your study of the Nifty Metal Index.
- Purchase any specific stock or collection of stocks based on your study of the Nifty Metal Index.
- Buy / Sell the Index Futures of Nifty Metal Index.
Step 5- Find your Entry price and exit price for better risk management, in case your analysis goes wrong.
Nifty Metal Index Constituents & Nifty Metal Index Stock Weightage
Performance Of Nifty Metal Index During 2022
Each stock's weight in the index is determined according to its free-float market capitalization, and at the time of rebalancing, no stock may have a weight greater than 34% or the combined weight of the top three stocks greater than 63%.
In the NSE, 15 businesses are listed under the Nifty Metal Index. The list of metal stocks and their weights as of the closing on April 20, 2022, are shown below.
- Tata Steel (TATASTEEL) – 22.59%
- Hindalco Industries (HINDALCO) – 15.54%
- JSW Steel (JSWSTEEL) – 15.49%
- Adani Enterprises (ADANIENT) – 14.13%
- Vedanta Ltd. (VEDL) – 10.04%
- Jindal Steel & Power (JINDALSTEL) – 4.86%
- NMDC Ltd. (NMDC) – 4.05%
- APL Apollo Tubes (APLAPOLLO) – 3.27%
- Steel Authority of India (SAIL) – 3.08%
- National Aluminum Co. (NATIONALUM) – 2.08%
- Hindustan Zinc (HINDZINC) – 1.80%
- Ratnamani Metals & Tubes (RATNAMANI) – 0.90%
- Hindustan Copper (HINDCOPPER) – 0.82%
- Jindal Stainless (Hisar) Ltd. (JSLHISAR) – 0.76%
- Welspun Corp (WELCORP) – 0.59%
Nifty Metal Index Fluctuation throughout the week:
NIFTY METAL: 6,697.30 (06-Jan-23)
- On the weekly time frame the Index has started to get into Higher High, Higher Low Formation post the correction from April 2022 to June 2022. This Points towards the Beginning of uptrend.
- The prices have shown a bounce while taking support from the rising slope, which the prices respected since June 2022.
- The Index is trading above all the key moving averages, the 50, 100 and 200 Days EMA. That confirms the intact uptrend.
- Momentum indicator RSI on Daily as well as on weekly Timeframe have sustained above 50 mark reflecting strong momentum of the underlying uptrend.
- Going ahead we expect the prices to go higher till the level of 7500, the Bullish view will be negated if we see prices sustaining below 5,800 level.
5 Nifty Metal Stocks – Our Best Recommendations
1) Apl Apollo Tubes Ltd (APLAPOLLO): - 1,119.60 (06-Jan-23)
- On the weekly timeframe prices were in a strong uptrend from May 2020, Post September 2021 prices witnessed a pause in the trend. Prices are currently trading near its all-time high level which indicates that prices are in a strong momentum.
- On the daily charts we can observe that the volumes are increasing with the Prices, which confirms that the demand is pushing the price higher.
- Bollinger band on the daily timeframe have started to expand which tells that the volatility in the prices is rising for upside move.
- RSI on the weekly timeframe have never created new lows since June reflects the presence of strong momentum.
- Going ahead we expect the prices to go higher till the level of 1442 where the stoploss must be 945 on the closing basis.
2) JSW Steel Limited (JSWSTEEL): - 728.35 (09-Jan-23)
- JSW Steel is in a clear Higher High, Higher Low formation which indicates that the stock is in its uptrend formation.
- The stock is currently trading above its key moving averages (50& 200 Days EMA) which confirms the uptrend.
- The move on the upside was preceded by the breakout in Cup & Handle pattern, which indicates beginning of the trend to the upside. The breakout was witnessed on 4th November 2022.
- The ratio charts against the metal index have shown a breakout which points towards the out performance of the stock.
- The momentum indicator RSI on the weekly timeframe is moving in sync with the price trend reflecting presence of momentum for the up move.
- Going ahead we expect the prices to go higher to the level of 800 where the stoploss must be 715 on the closing basis.
3) Jindal Stainless Ltd (JSL): - 239.30 (06-Jan-23)
- JSL is currently trading at its record high which means that the stock already is in strong momentum.
- The stock this week has shown a breakout from a rounding bottom pattern, indicating beginning of the trend to the upside.
- The Ratio charts against nifty metal is rising which shows the out performance from the stock.
- The stock is currently trading above its key moving averages (50 & 200 Days EMA) confirms the uptrend.
- RSI plotted on the weekly timeframe is rising and have sustained above 60 mark which reflects the rising momentum of the underlying trend.
- Going ahead we expect the prices to go higher to the level of 300 where the stoploss must be 180 on the closing basis.
4) Jindal Steel & Power Ltd (JINDALSTEL): - 591.10 (09-Jan-23)
- JINDALSTEL is following the rising trendline since June 2022, pointing towards the overall bullish undertone.
- The stock in the latest trading session has given a breakout from Bullish flag pattern, indicating continuation of prior uptrend.
- The Ratio charts against the NIFTY METAL have shown a breakout which shows the outperformance of the stock.
- The RSI plotted on the weekly timeframe is moving in sync with the prices which tell that the prices have the momentum to move higher.
- Going ahead we expect the prices to go higher to the level of 675 where the stoploss must be 474 on the closing basis.
5) Tata Steel Ltd (TATASTEEL): - 115.65 (06-Jan-23)
- TATASTEEL post July 2021, now has started to get into Higher High, Higher low formation suggesting reversal to the upside.
- The stock in the latest trading week has given breakout from the rectangle pattern, indicating beginning of the trend toward upside.
- The Ratio charts against the NIFTY METAL have shown a breakout of downwards slopping channel showing outperformance
- The Super trend (7, 2) has turned positive, confirming reversal to upside.
- The RSI plotted on the weekly timeframe has sustained well above 50 mark, reflecting presence of momentum for up move.
- Going ahead we expect the prices to go higher to the level of 140 where the stoploss must be 100 on the closing basis.
Concluding Thoughts
The metal industry had a particularly successful financial year in 2021–2022. The fundamental cause of the rally can be attributed to the liquidity present in markets around the world and the subsequent rise in foreign investments in India, the change in Chinese policies toward metals, and—most importantly—the extremely strong demand brought on by the opening up of economies and a shortage of supply as a result of logistical issues linked to COVID restrictions, driving up the price of metals as well as the price of other commodities.
Whatever the future may hold, the metal sector has grown to be a very appealing proposition for many investors and traders as a result of the recent price movement.
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