Tata Steel vs JSW Steel: Which metal stock looks better on technical charts?

Shares of Tata Steel Ltd and JSW Steel Ltd are among the top bets of investors in the metal sector.  Both stocks have delivered multibagger returns in three years. While Tata Steel stock surged 254.43%, shares of JSW Steel zoomed 180% during the period. However, the metal stocks generated average returns below the period of three years.  

In the current session, Tata Steel shares were trading flat at Rs 127.55, down 0.47% on BSE. The metal stock has gained 7.23% this year. Total 10.14 lakh shares of the firm changed hands amounting to a turnover of Rs 13.09 crore. Market cap of the Tata Group firm stood at Rs 1.55 lakh crore in the afternoon session. The stock has a beta of 1.2, indicating high volatility in a year. 

In terms of technicals, the relative strength index (RSI) of Tata Steel stands at 55.5, signaling it's neither trading in the overbought nor in the oversold territory.  Tata Steel shares are trading higher than the 30 day 50 day, 100 day, 150 day and 200 day moving averages but lower than the 5 day, 10 day and  20 day moving averages. 

In case of JSW Steel, the stock was trading at Rs 774.90 in the afternoon session today. The metal stock has gained 0.05% this year.  Total 0.33 lakh shares of the firm changed hands amounting to a turnover of Rs 2.61 crore. Market cap of JSW Steel stood at Rs 1.89 lakh crore in the afternoon session. The stock has a beta of 1.2, indicating high volatility in a year.         

In terms of technicals, the relative strength index (RSI) of JSW Steel stands at 40.1, signaling it's neither trading in the overbought nor in the oversold territory.  JSW Steel shares are trading higher than the 100 day, 150 day and 200 day moving averages but lower than the 5 day, 10 day, 20 day, 30 day and 50 day moving averages. 

Here’s a look at the outlook of both Tata Steel and JSW Steel shares as we list out experts’ pick among the two metal stocks. 

Aditya Gaggar, Director of Progressive Shares is bullish on Tata Steel.  

"In July, both stocks gave a bullish breakout from the different patterns (JSW Steel- Rounding Bottom Formation and Tata Steel- Symmetrical Triangle Formation) which suggest a continuation of the journey towards the north. In JSW Steel, the trend is strong as per ADX but it fails to hold higher levels, and the momentum indicator RSI also diverged from the price activity and gave a bearish divergence while in Tata Steel follow-up buying was witnessed along with a positive crossover in MACD. Another trend following indicator ADX shows the beginning of a new trend. In a head-to-head comparison, we will pick Tata Steel and we have technical coverage on Tata Steel for the targets of Rs 147-172," added Gaggar.  

Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher termed Tata Steel as a better bet with a greater upside potential. "Both metal stocks have consolidated near their peak levels with Tata Steel resisting near Rs 135 zone and cooling off to some extent with near term support at Rs 123 level. A decisive breach above Rs 135 zone shall trigger for a breakout with next expected target of Rs 145-150 levels. JSW Steel also after resisting near  Rs 840 zone is witnessing a range bound movement with Rs 768 maintained as the near term support and once a move past Rs 795-800 levels is confirmed, then can anticipate for further rise till Rs 840 zone. Both are well placed with Tata Steel having a better opportunity since it has recently given a breakout above the resistance zone of Rs 124 levels and has maintained a strong trend with much upside potential," said Parekh.  

Abhijeet from Tips2trades said, "JSW Steel has turned bearish on the Daily charts with strong resistance at Rs 793. A daily close below the support of  Rs 766 could lead to a sharp fall till  Rs 750 in the near term. Comparatively, JSW Steel looks a much better bet in the long term as compared to Tata Steel with a lower PE ratio & better & more consistent sales growth numbers." 

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions. 

 

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