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The short-term uptrend in Tata Chemicals is gaining momentum. The stock surged almost 3 per cent on Monday although the benchmark indices closed in the red. Tata Chemicals was in a strong downtrend since July last year. This fall halted at a low near ₹310 in February. The stock has reversed sharply higher from this low and is up about 37 per cent. The price action since January reflects the formation of an inverse head-and-shoulder reversal pattern.
The stock is now well placed above the 200-DMA. Immediate support is available at ₹417-421 levels. While above this support zone a near-term rise to ₹440 is possible, a break above ₹440 can take the stock higher to ₹450 and ₹455. Short-term traders can go long. Stop-loss can be kept at ₹416 for a target of ₹438. Revise the stop-loss higher to ₹430 if it moves higher to ₹435. The outlook will turn negative only if it declines below ₹400. But an immediate break below ₹400 looks unlikely.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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