Metals sector to outperform in coming months, says Indiacharts.com’s Srivastava
A very good move in leaders like National Aluminum Company, Hindalco Industries, Vedanta, is because aluminum prices hit 52 week highs all last month, said Rohit Srivastava, founder and strategist of Indiacharts.com.
The good news, although in recent days, is that the rally in commodity prices has become a bit more widespread, he said.
“So you started bringing copper in because copper was the strongest last year, and then it actually went into a long consolidation mode over the last four to five months and wasn’t really on the move.” . You also saw a pretty deep correction in lead prices, for example, and in fact the most important, outperforming sector last year was steel. In fact, you have seen steel and iron ore prices drop since the Chinese question arose which has kind of removed most of them. So the good news is that we are starting to regain that momentum, ”added Srivastava.
“So copper prices went up, steel prices went up a little bit, they still haven’t come back to where they were, but at least you’ve had that increase, so you feel like they have. maybe hit bottom. You see new highs in zinc, you see new highs in nickel. So, everything set up, and last but not the least to watch is the dollar itself, ”he said.
“So with the dollar index having flipped, I think over the last three or four days, it gives me the impression that the longer term dollar bear market may have picked up. If this is true, then these increases in commodity prices that we are seeing now could in fact continue in the months to come, perhaps until the end of the year, ”he stressed.
Thus, his feeling is that the metals sector continues to outperform not only the names of aluminum and copper, but that it may also benefit from the participation of steel and the rest of the segments of the sector. It should become more of a general movement and might even continue to do so regardless of what Nifty is doing. “So Nifty can go its own way, but if you have rising commodity prices and a falling dollar environment, then the metals sector would outperform in the coming months,” says Srivastava.