Tata Steel’s stock nose-dived 9.5 per cent with good volume in the prior week, emphatically breaking a key support at Rs.250 levels. The stock continues to be in a downtrend across all-time frames — long, medium and short-term.
The recent bullish signs have faded; the stock needs fresh set of bullish signals in the coming weeks to indicate trend reversal. Therefore, traders can continue to hold their short position with a stop-loss at Rs.255 levels.
Any rally can encounter resistance at Rs.250 levels and the stock can resume its downtrend. The downside targets are Rs.225 and then Rs.210. Next support below this level is around Rs.200 which is closer to its August 2013 low.
However, a strong rally above Rs.250 can take the stock up to Rs.275. Further rally above this level can result in a corrective rally extending to Rs.288 and Rs.300 levels. Only a strong breakthrough of Rs.314 levels will alter the short-term downtrend.
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