Tata Steel Limited

Buy - TATASTEEL

CMP (NSE) 15:59, 16 Sep

1,436.75 -18.35-1.26%

Download

PDF

Sector

Metals

Add to

WatchList

Add to

Portfolio

Reco. Price

754

Period

6-9 Months

Target Price

932

upside

23.6%

Stop Loss

670

Last updated on

04 Jan, 2018

Classic Flag Pattern breakout 

Tata Steel has been stuck in a consolidation phase and has gone through a healthy price correction in the past eight weeks. During this phase, the stock corrected by ~10%, falling from its previous peak of Rs735 hit on October 30, 2017 to lows of Rs660.7 hit on December 6, 2017. This phase saw Tata Steel forming a classic Flag Pattern on the weekly chart. Last week of December 2017 saw prices rise smoothly accompanied with increasing volumes. This strong price movement has finally triggered a breakout.
 
Projection of the Flag Pattern indicates that Tata Steel is expected to make an attempt to rally towards its potential target of Rs932 in the coming 6-9 months. The breakout will stand void once the stock cracks below Rs670 on weekly closing basis.
 

Higher-Top-Higher-Bottom structure 

Since the October 2015 lows of Rs187, the stock has been moving smoothly in a Higher-Top-Higher-Bottom structure. The recent price correction was another lower bottom, which was created around the Rs660 levels. Considering that Tata Steel surpassed its previous peak of Rs739 hit on April 9, 2010 further confirms the continuation of the overall structure. Moreover, other momentum oscillators also indicate that Tata Steel would extend the current strong structure.

Index vs Stock Relative Chart

Please refer to Research Disclaimer for additional recommendation parameter, analyst disclaimer and other disclosures.