Sell TATA STEEL
|Sell Range||415 – 404|
|Target||350 – 330|
|Duration||20 – 25 Trading Days|
|Potential Return^||12 – 17%|
|CP#||Idea||Sell Range||Target||StopLoss*||Duration||Potential Return^|
|399.8||SELL||415 – 404||350 – 330||425||20 – 25 Trading Days||12 – 17%|
# CP – closing price on Dec 05, 2019
* Maintain recommended StopLoss by daily closing basis.
Once 1st target hit, reset StopLoss at 375.
^ The returns are calculated based on CP#
Tata Steel is one of the world’s largest steel companies, manufactures and distributes hot and cold rolled coils and sheets, galvanized sheets, precision tubes, tire based wires, spring wires, wire rods, construction rebars and bearings. The company also offers steel doors, roofing sheets, plumbing pipes, tubes, corrosion-resistance steels etc. Tata Steel is one of the few steel companies that are fully integrated – from mining to the manufacturing and marketing of finished products. In Q2FY20, the company’s net income was dropped by 14.22% to Rs. 34,579.18 crore and Net Profit improved by 33.01% YOY to Rs.4,021 crore.
|Sectoral Index||Nifty Metal|
TECHNICAL OBSERVATIONS (MONTHLY)
- The entire corrective price action since 2008 till today occurred in a well defined Symmetrical Triangle pattern as highlighted in the adjoining chart.
- There is a false breakout in mid-2017, when price temporarily moves above the resistance level, but later retreats into the triangle as it started.
- Presently, the stock price has placed near the upper edge of the sideways triangle. This upper edge also corresponds to the previous intermediate highs, which were tested multiple times since 2008, thereby making it a strong resistance.
TECHNICAL OBSERVATIONS (DAILY)
- Technical indicators are currently giving negative signals as Tata Steel closes below the short term (10 day EMA) and medium-term (20 day EMA) moving averages.
- The momentum oscillator RSI gives trendline breakout, which warns us that the stock has lost its earlier upwards momentum.
- The recent price development indicates an opportunity for a SHORT trade. Look to Short this stock as per the levels mentioned above.