Mobarakeh Steel Company is the biggest steel producer in Middle East and Northern Africa and the biggest DRI producer in the world. Guided by a mission to play the leading role in Iran’s industrial, financial, and social growth, it is the quality producer of more than 50% of Iran’s steel in all major markets including automotive, construction, household appliances, and packaging. Mobarakeh Steel operates in seven industrial complexes and employs more than 20,000 people in different parts of the country.
Having this brief introduction in mind, we are going to analyze this company through its performance in stock exchange market from technical perspective.
Obviously, MSC has fluctuated in an uptrend channel, as shown below, since its IPO date till today. Looking more precisely to its chart, reveals some important notes which are going to be described in more depth:
The share had started a super-cycle rally (lasting almost 970 trading days) from IRR 340 area to almost IRR 1,900 from where a correction of almost 61.8% price retracement occurred during 370 trading days. This combination of price and time retracement could be enough for a super-cycle correction to end which was approved later on following a bearish-trend break above.
The upper band bearish channel has become a solid support for current prices as it is shown in the picture below. This area also overlaps 50% retracement of the latest impulsive move from IRR 970 to IRR 1,560.
The nearest support zone is IRR 1,260 that seems can be held, although if not, IRR 1,185 area would be the next and most critical zone to support prices. In contrary, IRR 1,543 area is the solid resistance not only because of the nearest peak, also 61.8% retracement of a move from all-time high of the chart to IRR 963 area where we still believe that the correction had ended. In case this resistant zone is passed, IRR 1,820 zone is the most probable target to hit.
Considering all above factors, we believe that the bullish trend is still intact in the long run. In near term also, it is believed that the current prices can be supported as the price and time retracements match for a classical correction to have ended. In order for this scenario to be considered true, a move above IRR 1,430 zone is required in the first step. A move above IRR 1,550 is required to finalize a bullish trend as it sets higher highs and in this case, the most probable price targets are IRR 1,820 and IRR 2,500 area accordingly.
It is noteworthy to have in mind that the mentioned scenario is considered as valid, as long as the IRR 1,190 area is held.