NMDC Steel Ltd Technical Momentum Shifts Amid Sideways Trend

Technical Trend Overview

NMDC Steel Ltd, a key player in the ferrous metals sector, currently trades at ₹41.25, down 1.65% from its previous close of ₹41.94. The stock has seen a 52-week high of ₹49.62 and a low of ₹28.35, indicating a wide trading range over the past year. The recent technical trend has shifted from mildly bullish to sideways, signalling a pause in upward momentum and potential indecision among market participants.

The daily moving averages remain mildly bullish, suggesting some underlying strength in the short term. However, weekly and monthly indicators paint a more cautious picture. The Moving Average Convergence Divergence (MACD) on both weekly and monthly charts is mildly bearish, indicating that momentum is waning and the stock may face resistance in sustaining gains.

Momentum Indicators: MACD and RSI

The MACD, a key momentum oscillator, has deteriorated from previous levels, with the weekly and monthly readings both signalling mild bearishness. This suggests that the recent upward momentum is losing steam, and the risk of a downward correction has increased. Meanwhile, the Relative Strength Index (RSI) remains neutral on both weekly and monthly timeframes, providing no clear buy or sell signals. The absence of RSI extremes indicates that the stock is neither overbought nor oversold, reinforcing the sideways trend narrative.

Bollinger Bands and Volatility

Bollinger Bands on the weekly chart show a sideways pattern, reflecting reduced volatility and a consolidation phase. On the monthly chart, however, the bands have turned bearish, hinting at potential downside pressure over a longer horizon. This divergence between weekly and monthly Bollinger Bands suggests that while short-term price movements may be range-bound, the broader trend could be tilting towards weakness.

Other Technical Signals: KST, Dow Theory, and OBV

The Know Sure Thing (KST) indicator on the weekly chart remains bullish, offering a counterpoint to the bearish MACD signals and suggesting some pockets of strength in momentum. However, the monthly KST is inconclusive, providing no definitive directional bias. Dow Theory analysis shows no clear trend on either weekly or monthly charts, underscoring the current market indecision surrounding NMDC Steel Ltd.

On-Balance Volume (OBV) presents a mixed picture: no trend is evident on the weekly scale, but the monthly OBV is bullish. This indicates that while short-term volume flows are uncertain, longer-term accumulation by investors may be occurring, potentially supporting future price stability or gains.

Price Performance Relative to Sensex

Examining NMDC Steel Ltd’s returns relative to the benchmark Sensex reveals underperformance in recent periods. Over the past week, the stock declined by 0.82%, while the Sensex gained 0.43%. The one-month return for NMDC Steel was -2.09%, compared to a modest Sensex decline of 0.24%. Year-to-date, NMDC Steel has fallen 6.8%, significantly lagging the Sensex’s 1.81% decline.

Over a longer horizon, the stock’s one-year return stands at 8.52%, slightly below the Sensex’s 9.85%. Data for three, five, and ten-year returns are unavailable for NMDC Steel, but the Sensex’s robust gains of 37.89%, 62.34%, and 264.02% respectively highlight the broader market’s outperformance over time.

Mojo Score and Grade Update

MarketsMOJO’s latest assessment downgraded NMDC Steel Ltd’s Mojo Grade from 'Strong Sell' to 'Sell' on 09 February 2026, reflecting a slight improvement in outlook but still signalling caution. The current Mojo Score stands at 39.0, indicating weak technical and fundamental momentum. The Market Cap Grade is 3, suggesting a mid-tier market capitalisation relative to peers in the ferrous metals sector.

Implications for Investors

The mixed technical signals suggest that NMDC Steel Ltd is in a consolidation phase, with short-term bullishness tempered by medium-term bearish momentum. The mildly bullish daily moving averages and weekly KST indicator offer some optimism, but the bearish MACD and monthly Bollinger Bands caution against aggressive positioning.

Investors should be mindful of the sideways trend and monitor key support levels near ₹41. The stock’s inability to sustain above recent highs around ₹41.97 and the downward pressure from the MACD could lead to further volatility. Given the underperformance relative to the Sensex and the 'Sell' Mojo Grade, a cautious approach is warranted.

Sector and Industry Context

NMDC Steel Ltd operates within the ferrous metals industry, a sector that has faced cyclical headwinds due to fluctuating raw material costs and global demand uncertainties. The sideways technical trend aligns with broader sector challenges, where many peers are also grappling with volatility and muted price momentum.

Investors should consider the company’s technical signals in conjunction with sector dynamics and macroeconomic factors such as steel demand, input cost inflation, and government policies impacting the ferrous metals space.

Conclusion

In summary, NMDC Steel Ltd’s recent technical parameter changes reflect a shift from mild bullishness to a sideways consolidation phase. While some indicators like daily moving averages and weekly KST suggest pockets of strength, the prevailing MACD and Bollinger Bands point to caution. The downgrade to a 'Sell' Mojo Grade and underperformance relative to the Sensex reinforce the need for a measured investment stance.

Investors should closely monitor momentum indicators and price action around key support and resistance levels before committing fresh capital. Given the mixed signals and sector headwinds, a wait-and-watch approach or selective exposure aligned with broader portfolio strategy may be prudent.

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