The stock of Tata Steel zoomed 18 per cent, moving past above the immediate resistance at Rs.230 and the 21 and 50-day moving averages in the prior week. Backing this move, there is an increase in daily volume over the past five sessions.
Moreover, the daily relative strength index has entered the bullish zone from the neutral region and the weekly RSI has entered the neutral region, displaying a positive divergence. There are signs of trend reversal in the stock.
Both the daily and weekly price rate of change indicators feature in the positive zone, implying buying interest. A strong rally above the current resistance level of Rs.250 will pave way from an up move to Rs.265 and then to Rs.280 levels.
Traders with a short-term view can consider buying the stock on dips with a stop-loss at Rs.235. Key supports are at Rs.230 and Rs.215.