Technical Analysis

Strong support can cushion Tata Steel

Gurumurthy K | Updated on January 16, 2018 Published on September 18, 2016


Tata Steel (₹359.05)

Tata Steel plummeted 9 per cent last week. However, the stock has support between ₹355 and ₹345 which may halt its fall. Though a test of this support zone is possible this week, a break below this level is less likely. A subsequent reversal from this support zone will take the stock higher to ₹385 and ₹390 once again. Such a reversal may also increase the possibility of a sideways range-bound move between ₹345 and ₹400 for some time. A strong break above ₹390 will take it further higher to ₹431 — the 61.8 per cent Fibonacci retracement level. Short-term investors holding long positions near ₹375 can accumulate near ₹350 with the same stop-loss at ₹340 for the target of ₹430. Medium-term investors can also accumulate near ₹350 while retaining the stop-loss at ₹310. The stock will come under pressure only if it falls below ₹345. Such a fall will increase the danger of the fall extending to ₹330 or ₹320.

Published on September 18, 2016

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