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Tata Steel did not decline below the key long-term support at Rs 600; recovering from an intra-week trough at Rs 631.

The long-term trend line is also still intact. The decline to Rs 630 is in consonance with our medium-term view that the stock would move in the band between Rs 600 and Rs 900 for a few months before the long-term up-move resumes.

The lower boundary can be moved a little lower to Rs 550. Penetration of this level will drag the stock towards the next long-term support at Rs 500.

Friday’s reversal implies that volatility would return in the short-term when the stock can decline to Rs 626 or Rs 575.

Resistances for the week would be at Rs 707 and then Rs 741.

— Lokeshwarri S. K.

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Play defensive in a volatile market

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