Tuesday, June 23, 2009

SAIL (Rs 148.10) has broken down the trendline support and also major support near Rs 157-158 levels. The stock rose 3.5 times from lows of Rs 55 in November'08 and now looks to take a breather before further rally as it now trades in a down-channel. The downside target can be Rs 125-130 for SAIL where gap-up level is formed after election results. The stop loss for the downside target can be Rs 159 which was previous strong support.

On Weekly Graph, the stock formed an evening star pattern which is bearish in nature, good support in weekly graph too comes near Rs 120-125 levels before which one can postpone buying.

Thai authorities are about to slap up to 32% anti-dumping duty on import of a vital steel product from India, if implemented the same can impact SAIL negatively as they are exporters of flat hot-rolled coils to Thailand. Indian steel makers are demanding a similar duty curb against inflows from China, Ukraine, Egypt and other countries but so far Indian government has remained silent on it. Even though the duty is slapped it may still not fulfill the needs of Indian Steel makers and notwithstanding prices here can remain higher than imported steel.
While the Indian steel companies are still negotiating hard for their coking coal contracts for the fiscal year, they may face a bumpy road ahead.   Xtrata, a Swiss mining major and UK-based Anglo American that together own the second largest reserves of metallurgical coal in the world are talking merger. The united company will be second only to BHP Billiton.   The merger is expected to weigh heavily on the steel companies like SAIL, Tata Steel, JSW Steel as India is deficient in coking coal. 

No comments: