Tata Steel tech chart now similar to 2007; big crash coming or time to buy?

In 2007, Tata Steel skyrocketed from Rs 100 to Rs 700 in less than four years; Similarly, since 2020 the stock price grew seven-fold to a high of Rs 1,534.50.

The Tata group steel major is likely to be in focus in the near-term for more than one reason. Tata Steel, on Tuesday, announced a share spilt in the ratio of 10:1, while the company also reported a near 47 per cent rise in net profit for the March 2022 quarter. READ MORE

The stock has jumped seven-fold to reach its historic peak of Rs 1,534.50 from the lows Rs 240 touched in 2020. Such a similar sharp move was seen way back in 2007, wherein the stock skyrocketed from levels of Rs 100 to Rs 700 in less than four years. 

At present, Tata Steel trades 16 per cent lower from its all-time high, and market participants are likely to be anxious to know the next move, given the positive news flow at the counter preceded by a marvellous rally. 


 

Tata Steel Ltd (TATASTEEL)

Outlook: 200-DMA, a major playoff 

Technically, the stock shows a negative bias with a formation of “Head and Shoulder” on the daily chart and “Double Top” on the weekly setup. However, the existing support at 200-day moving average (DMA) could provide some relief. 

In the medium-term scale, the Rs 1,220 becomes the next support mark, which is its 100-DMA. The trend may trigger a bearish mode if it violates the most critical neckline of Rs 1,050.

On the higher side, the stock must overcome the hurdle of Rs 1,400-mark. A significant line that can excite the bulls to ride the next rally.

The outlook remains stable above the 200-DMA and one can avoid the stock it if it fails to adhere the said mark. CLICK HERE FOR THE CHART