The stock of Tata Steel failed to gain bullish momentum and started to decline. After its Q2 results, the stock plunged, breaking a key support at Rs.230 and closed the week with 10 per cent loss.
This decline has mitigated the short-term uptrend. The relative strength index on the daily and weekly charts is in the bearish zone. The stock trades well below its 50- and 200-DMA. It has resumed its intermediate as well as medium-term downtrend and is once again heading down to test the key support level of Rs.200.
Traders with a short-term outlook can consider selling the stock on rallies while maintaining a stop-loss at Rs.230. The medium-term trend for the stock has been down from its May high of Rs.384. An emphatic breakthrough of the significant support at Rs.200 can reinforce the downtrend and drag the stock down to Rs.185 and Rs.165 levels.
Key resistances are placed at Rs.230, Rs.250 and Rs.265.
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