Hindalco’s prices go down as the market tremble

Hindalco is the leader in metal businesses in India with leading capacity in Aluminium and copper and also the world’s largest aluminium rolling company. The company also has wide range of products along with its brands with a presence in 12 countries which has its plants. With the state-of-art facilities in its copper smelter and fertilizer plant, the company is considered as the global aluminium and copper producer as it has a delivery contract of High-Grade Aluminium on the London Metal Exchange (LME) along with the upgradation of its copper quality to Grade A on the LME.
The following chart shows the downward trend of the company from 14th February 2020 which has led to the decline of its share price by almost 50% which shows the volatility of the stock. The company has cut its products prices such as aluminium ingots,billets and wire rods for the fifth time in a row during the quarter which is almost 2-3% decline in its prices. The Global benchmark index of 3-month futures of aluminium have slipped by more than 16% in the current quarter compared to the previous quarter. The Bollinger bands shows a downward trend as the candlesticks formed are closer to the lower band which has been continuing over a period of time. There is no signal of a reversal trend that would boost the share price of the company as the current scenario of metal industry has been affected by the spread of COVID-19.
 

With the decline in the demand due to the lockdown of the various companies amid the outbreak of the Coronavirus, many metal companies have halted their production in few areas whereas, the PSU steel makers are required to maintain their production level. The lockdown of various companies have impacted the steel industry as the demand for various metals have decreased due to the decline in consumption level.
The Ichimoku cloud indicator also portrays the bearish trend of the stock as the formation of the red cloud due to the consistent fall of share price. The Chikou span line also shows a downward trend as the line is falling downward along with the red cloud. But, the base line forming above the conversion line indicates a buy signal for the stock as the business of the company is well-established and has captured major market share in the industry. The financial position of the company has been strong over the years as, the company managed to reduce its debt from 168% to 95% lessening the debt capital in the company. Despite of being a leader in the industry, the company’s shares have been underperforming the market which has to be managed by the company to secure its position.