NMDC Steel Ltd Faces Technical Momentum Shift Amid Mixed Market Signals

Technical Trend Overview and Price Movement

NMDC Steel Ltd, a key player in the ferrous metals sector, currently trades at ₹41.32, down 2.57% from the previous close of ₹42.41. The stock’s intraday range on 2 Feb 2026 spanned from ₹40.71 to ₹42.50, indicating moderate volatility. Over the past 52 weeks, the share price has fluctuated between ₹28.35 and ₹49.62, underscoring a wide trading band amid sectoral and macroeconomic influences.

The recent technical trend has shifted from mildly bullish to sideways, signalling a pause in upward momentum and a potential consolidation phase. This change is significant as it suggests that investors and traders are reassessing the stock’s near-term prospects amid mixed signals from key technical indicators.

MACD and RSI: Divergent Signals

The Moving Average Convergence Divergence (MACD) indicator, a popular momentum oscillator, shows a mildly bearish stance on both weekly and monthly charts. This suggests that the stock’s upward momentum has weakened, with the MACD line likely below the signal line, indicating potential selling pressure or a lack of strong buying interest.

Conversely, the Relative Strength Index (RSI) on weekly and monthly timeframes currently emits no clear signal, hovering in a neutral zone. This absence of an overbought or oversold condition implies that the stock is neither excessively bought nor sold, reinforcing the sideways trend narrative. The RSI’s neutrality may also reflect indecision among market participants regarding the stock’s immediate direction.

Moving Averages and Bollinger Bands Analysis

On a daily basis, moving averages present a mildly bullish outlook, suggesting that short-term price averages remain above longer-term averages, which typically supports upward price movement. However, this mild bullishness is tempered by the weekly Bollinger Bands indicating a sideways pattern and the monthly Bollinger Bands signalling bearishness. The contraction of Bollinger Bands on the weekly chart points to reduced volatility and a consolidation phase, while the monthly bearish indication warns of potential downside risks if the stock fails to break out of this range.

Additional Technical Indicators: KST, Dow Theory, and OBV

The Know Sure Thing (KST) indicator on the weekly chart remains bullish, suggesting some underlying positive momentum in the medium term. However, the monthly KST reading is not available, limiting a longer-term perspective. Meanwhile, Dow Theory and On-Balance Volume (OBV) indicators show no discernible trend on both weekly and monthly timeframes, indicating a lack of strong directional conviction from price and volume dynamics.

Performance Comparison with Sensex

Examining NMDC Steel’s returns relative to the benchmark Sensex reveals a mixed performance. Over the past week, NMDC Steel outperformed the Sensex with a 4.4% gain compared to the Sensex’s 1.0% decline, indicating short-term resilience. However, over the last month and year-to-date periods, the stock underperformed slightly, with returns of -4.51% and -6.64% respectively, compared to the Sensex’s -4.67% and -5.28% returns.

Longer-term data shows the stock lagging the Sensex’s robust gains, with a 1-year return of 1.2% versus Sensex’s 5.16%, and no available data for 3, 5, and 10-year periods for NMDC Steel. The Sensex’s strong multi-year performance, including a 224.57% gain over 10 years, highlights the challenges NMDC Steel faces in matching broader market growth.

Mojo Score and Grade Update

MarketsMOJO’s latest assessment assigns NMDC Steel a Mojo Score of 39.0, categorising it as a Sell, an upgrade from the previous Strong Sell rating issued on 28 Jan 2026. This improvement reflects a slight easing of negative sentiment but still signals caution for investors. The company’s Market Cap Grade remains low at 3, indicating limited market capitalisation strength relative to peers.

The downgrade in technical trend from mildly bullish to sideways, combined with the mixed signals from MACD, RSI, and moving averages, supports the cautious stance. Investors should weigh these technical factors alongside fundamental considerations before making portfolio decisions.

Outlook and Investor Considerations

NMDC Steel’s current technical landscape suggests a period of consolidation with no clear directional bias. The mildly bearish MACD and neutral RSI imply that momentum is subdued, while daily moving averages offer some support. The sideways Bollinger Bands and lack of trend confirmation from Dow Theory and OBV further reinforce the uncertainty.

For traders, this environment may warrant a wait-and-watch approach, looking for a decisive breakout above resistance levels near the recent high of ₹49.62 or a breakdown below support near ₹28.35 to confirm a new trend. Longer-term investors should consider the company’s fundamentals and sector outlook in conjunction with these technical signals.

Sector Context and Broader Market Implications

The ferrous metals sector, to which NMDC Steel belongs, has faced headwinds from fluctuating raw material costs, regulatory changes, and global demand uncertainties. These factors have contributed to volatility in stock prices and technical indicators across the sector. NMDC Steel’s sideways momentum aligns with this broader sectoral caution, as investors digest mixed signals from economic data and commodity price trends.

Given the sector’s cyclical nature, technical indicators such as MACD and Bollinger Bands can provide valuable insights into potential turning points. Currently, the mildly bearish monthly Bollinger Bands suggest that the stock may be vulnerable to further downside if sector conditions deteriorate. However, the weekly KST’s bullishness offers a counterbalance, hinting at possible medium-term recovery if market sentiment improves.

Conclusion

NMDC Steel Ltd’s recent technical parameter changes reveal a nuanced picture of price momentum and market sentiment. The shift from mildly bullish to sideways trend, combined with mixed signals from MACD, RSI, moving averages, and other indicators, underscores the stock’s current indecision. While short-term gains have been seen relative to the Sensex, longer-term performance remains subdued.

Investors should approach NMDC Steel with caution, monitoring key technical levels and sector developments closely. The current Sell rating by MarketsMOJO reflects these uncertainties, though the upgrade from Strong Sell indicates some stabilisation. Ultimately, a clear directional breakout will be necessary to confirm a renewed trend and justify a more optimistic outlook.

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