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Tata Steel moved listlessly between Rs 580 and Rs 600 in the early part of the week before recording a new closing low for 2008 on Friday.

The stock is currently testing the low of Rs 557 recorded on January 25. If the sideways move between Rs 600 and Rs 700 since July is the second leg of the down move from the May peak, the third leg has the potential to drag the stock lower towards the support zone between Rs 480 and Rs 500.

A weekly close above Rs 700 is needed to mitigate the negative outlook for the medium-term.

Near-term resistances would be at Rs 614 and then Rs 636. Traders can initiate fresh shorts on a failure to surpass the first resistance.

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