NMDC Steel Ltd Faces Technical Momentum Shift Amid Mixed Market Signals

Technical Trend Overview and Price Movement

As of 4 Feb 2026, NMDC Steel Ltd’s share price closed at ₹41.64, down 1.68% from the previous close of ₹42.35. The stock traded within a range of ₹39.74 to ₹43.84 during the day, remaining well below its 52-week high of ₹49.62 but comfortably above the 52-week low of ₹28.35. This price action underscores a consolidation phase after a period of volatility.

The technical trend has shifted from mildly bullish to sideways, signalling a pause in upward momentum. This change is corroborated by the Bollinger Bands on the weekly chart, which have flattened, indicating reduced volatility and a lack of directional conviction. On the monthly timeframe, Bollinger Bands suggest a bearish bias, hinting at potential downside risks if support levels fail to hold.

MACD and RSI Signals: Divergent Indicators

The Moving Average Convergence Divergence (MACD) indicator presents a mildly bearish outlook on both weekly and monthly charts. The MACD line remains below the signal line, suggesting that the recent momentum is weakening. This bearish crossover on longer timeframes often precedes price corrections or sideways movement, aligning with the current technical trend shift.

Conversely, the Relative Strength Index (RSI) offers a neutral stance, with no clear signals on weekly or monthly charts. The RSI hovering around the mid-50s indicates neither overbought nor oversold conditions, reflecting indecision among traders. This lack of momentum in RSI supports the sideways trend narrative, as the stock struggles to gain directional strength.

Moving Averages and Other Technical Indicators

Daily moving averages remain mildly bullish, with the short-term averages (such as the 20-day and 50-day) positioned above longer-term averages, suggesting some underlying strength in the near term. However, this bullishness is tempered by the weekly and monthly indicators, which show mixed signals.

The Know Sure Thing (KST) indicator on the weekly chart is bullish, signalling potential for upward momentum in the short term. Yet, the absence of a clear monthly KST trend tempers enthusiasm for sustained gains. Similarly, Dow Theory assessments indicate a mildly bullish weekly trend but no definitive monthly trend, reinforcing the notion of a market in flux.

On-Balance Volume (OBV) readings show no clear trend on either weekly or monthly charts, suggesting that volume is not confirming price movements. This lack of volume support often precedes price stagnation or reversals, adding to the cautious outlook.

Fundamental Context and Market Comparison

NMDC Steel Ltd operates within the ferrous metals industry, a sector often sensitive to global commodity cycles and domestic infrastructure demand. The company’s current Mojo Score stands at 29.0, reflecting a Strong Sell rating, an upgrade in severity from the previous Sell grade assigned on 3 Feb 2026. This downgrade signals deteriorating fundamentals or technical outlook as assessed by MarketsMOJO’s proprietary algorithms.

Market capitalisation grading remains low at 3, indicating limited size and liquidity compared to larger peers. This factor can exacerbate price volatility and limit institutional interest.

When analysing returns, NMDC Steel Ltd has underperformed the broader Sensex benchmark over recent periods. The stock posted a modest 0.22% gain over the past week, lagging behind the Sensex’s 2.30% rise. Over one month, the stock declined 8.96%, significantly worse than the Sensex’s 2.36% fall. Year-to-date returns also show a 5.92% loss versus the Sensex’s 1.74% decline. Over the last year, the stock gained 4.89%, trailing the Sensex’s 8.49% advance.

Longer-term returns are unavailable for the stock, but the Sensex’s robust 37.63% and 66.63% gains over three and five years respectively highlight the stock’s relative underperformance within the market.

Investor Implications and Outlook

The mixed technical signals and recent downgrade to Strong Sell suggest caution for investors considering NMDC Steel Ltd. The sideways price momentum and bearish MACD on longer timeframes imply limited upside in the near term, while daily moving averages and weekly KST offer some short-term bullish potential.

Investors should monitor key support levels near ₹39 and resistance around ₹44, as breaches could signal renewed directional moves. The lack of volume confirmation and neutral RSI further emphasise the need for prudence.

Given the stock’s underperformance relative to the Sensex and the ferrous metals sector’s cyclical nature, investors may prefer to seek alternative opportunities with stronger technical and fundamental profiles.

Conclusion

NMDC Steel Ltd’s recent technical parameter changes highlight a stock caught between short-term bullish signals and longer-term bearish pressures. The downgrade to a Strong Sell rating by MarketsMOJO reflects this uncertainty and the stock’s relative weakness within the ferrous metals sector and broader market.

While daily moving averages and weekly momentum indicators suggest some potential for a short-lived rebound, the overall sideways trend and bearish monthly signals caution against aggressive positioning. Investors should weigh these technical insights alongside fundamental considerations and broader market conditions before making investment decisions.

In the current environment, NMDC Steel Ltd appears better suited for risk-averse investors to avoid or for traders to monitor closely for clear breakout or breakdown signals.

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