How long will NLMK shares ignore overbought

At the previous trading session they grew by 1.45%, closing at 279.24 rubles. The securities looked better than the market. The trading volume amounted to more than 2.9 billion rubles.

Positive sentiment on the steel market continues to push NLMK higher, ignoring overbought. The technical picture reports that the securities are overheated, which may soon lead to a local correction.

Today external background is mixed, we do not exclude, that sellers may start to press and keep the price within the frames of 278-272 rubles. Downfall below 270 RUR may serve as a negative signal to further decrease to 260-250 RUR. The local correction is not considered as a trend change yet, but only a technical necessity for further growth.

At the same time, the overbought area may be ignored even further, while the space for growth may be limited. It is not excluded that the resistance of 284 rubles will be passed from the bottom upwards, which will open the way to the rise above 290 rubles. The positive momentum may continue until the dividend register closes in early May, but drawdowns may occur earlier as well.

The external background is mixed this morning. The US indices after closing our main session on Monday remained at approximately the same levels. Asian markets are trading mostly in negative territory today. Futures are up 0.1%, up 0.58% and near the $66 level.

Taking into account the results of the previous evening trading we can assume that if the current background persists, the opening on NLMK shares will not be far from Monday's closing level.

The stock has been in an uptrend since 2014, which was broken in mid-2019 and reversed its direction. The bottom of the downtrend in NLMK stock was found around 100 rubles at the peak of the market panic due to the coronavirus pandemic, in March 2020. After updating the annual low, the trend in the stock changed to an uptrend. Buyers bought back the entire year's drawdown.

The RSI indicator is below the overbought zone. MACD curves tend to cross, which is positive for growth continuation. The more likely scenario is that NLMK stock prices will continue to rise above 300 rubles. At the same time, sideways or corrections may form locally, as technically the stock looks overheated.