SWING IDEA - SAILSAIL Stock Technical Analysis
Steel Authority of India Limited ( NSE:SAIL ) has been consolidating around the 95 resistance level for over a year. After multiple attempts, the stock finally broke out above this level in January 2024, turning it into a strong support zone.
Following the breakout, SAIL surged to a peak of 175, marking an 85% gain. However, the stock then saw a sharp retracement, correcting by nearly 47% and revisiting the rising trendline support around the 100-105 range. This level, which previously acted as resistance, has now become a critical demand zone.
Currently, SAIL is showing signs of renewed bullish momentum, bouncing off its trendline support and forming a potential reversal. The weekly MACD crossover, observed in the chart, further reinforces a trend reversal signal. Additionally, a short-term upside target of 12% is indicated, while a long-term potential target of 76% upside is visible in the chart, aligning with the previous swing high.
The chart also highlights three take-profit targets:
Target 1: The first profit-taking zone, offering an initial opportunity to secure gains.
Target 2: A mid-level profit-taking zone, aligning with previous consolidation areas.
Target 3: The final take-profit level around 175, marking the prior high and a potential full exit point for long-term investors.
KEY OBSERVATIONS:
One-year resistance of 95 was decisively broken in January 2024
Stock surged 85% to a high of 175 before correcting 47%
100-105 level now acts as a strong rising trendline support
Weekly MACD crossover signals a bullish momentum shift
Three take-profit targets identified, with the final target at 175
Potential upside target of 76% from support levels, aligning with previous highs
RECOMMENDATION:
Based on this technical analysis, holding SAIL for the long term could be a strong strategy. The potential returns include:
12% upside in the short term
76% upside from current levels, targeting previous highs around 175
This analysis presents a compelling buying opportunity in SAIL, fueled by its breakout, support validation, and momentum reversal.
IMPORTANT NOTE:
Investors should be aware that there is a chance the stock may retest the 100-105 support level before resuming its upward trajectory. This potential pullback should be carefully monitored, and investment strategies should be adjusted accordingly.
DISCLAIMER: This analysis is for educational and informational purposes only and should not be considered as financial advice. Technical indicators and historical data are not guarantees of future performance. Investors should conduct thorough research, assess risk tolerance, and consult a financial advisor before making any investment decisions.
