Where will JSW Steel stock bottom out? Check details here

Technically, the stock has near support at ₹ 960; below which the most important support level coincides with the key indicator on the weekly and monthly charts. Check key levels here

Shares of JSW Steel have declined up to 8 per cent in the last two trading sessions, after the Supreme Court (SC on Friday quashed JSW Steel's ₹ 19,700-crore resolution plan for Bhushan Power and Steel (BPSL), terming it "illegal" and ordering the liquidation of the debt-ridden company.

 

JSW Steel plans to review the SC order, and decide on the future course of action. The company had won the bid to acquire BPSL under the Insolvency and Bankruptcy Code (IBC), way back in the year 2019.

 

As of FY24, BPSL contributed 8 per cent to JSW Steel's consolidated net profit, and 12.5 per cent to its net sales. Analysts believe the SC order could have a modest impact on JSW Steel earnings, but could delay the company's growth trajectory by a few years. READ MORE

 

Against this background, here are the 2 key support levels as per the technical charts to watch out where the stock may potentially find a bottom.

 

JSW Steel

 

Current Price: ₹ 966

 

Downside Risk: 5.8%

 

Support: ₹ 960; ₹ 910

 

Resistance: ₹ 1,000; ₹ 1,010; ₹ 1,030

 

Amid the 2-day fall, JSW Steel stock is seen testing support around its 200-day Simple Moving Average (200-DSMA), which also coincides with the super trend line support around ₹ 960 levels. Technical charts suggest that in case the stock violates and trades consistently below ₹ 960, it can extend the fall towards ₹ 910 levels.

 

The ₹ 910-level is the most important support for JSW Steel stock, as it coincides with the weekly super trend line support and the 20-Monthly Moving Average (20-MMA). Charts show that the stock has managed to sustain above its weekly super trend line support since the breakout in November 2022. Similarly, the stock has been holding above its 20-MMA on a consistent basis since July 2022.

 

For now, it seems that the stock could enter a deeper corrective phase only if the support at ₹ 910 is broken. On the other hand, upside for now may be capped around ₹ 1,030 levels, with near resistance likely at ₹ 1,000 and ₹ 1,010 levels.