The stock of Steel Authority of India (SAIL), that ended the year 2020 on a high, saw considerable price correction in January 2021. That is, the price dropped from about ₹80 to ₹55 levels, losing about 31 per cent during that month. But the scrip quickly reversed and started to move upwards.
The scrip gradually gained, and it again faced a correction after reaching ₹80 levels in early March, though the price drop was minor. This time, ₹70 (where 50-day moving average coincides) acted as a strong base on the back of which the stock was able to build momentum. Consequently, it appreciated and last week it decisively breached the resistance of ₹80. Extending the rally, the stock went up on Monday as well with good volume.
The breakout has confirmed an ascending triangle pattern, which hints at continuation of the rally. Also supporting the positive bias are the relative strength index and the moving average convergence divergence, which shows fresh uptick. So, traders can buy the stock with stop-loss at ₹86 for a target of ₹96.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading)