Last time we tried to evaluate the fair value of metal index using extreme sentimental and running point of control when the metal index stares at 60% draw-down.
The metal index in the last couple of months had recovered from the drawdown moved significantly from 1483 to 2550 levels which delivered 72% returns since the low of March 2020 when the entire nation goes for a lockdown. Tremendous value investing opportunity struck when the economy almost came to standstill.
At this point in time sector is bit over heated and nearing the important resistance zone 2580 where profit booking and consolidations are likely to be expected in this zone before the metal index move out of this zone.
As the price travels around important zone more trading participants will be likely to chase momentum and might get could with any breaks and breakout failures are likely common when the whole crowd is expecting more and more.