Tata Steel shares give breakout, trading at six-month high; time to buy?

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Tata Steel was the top gainer on Sensex and Nifty today amid a correction in the broader market for the second consecutive session. In fact, Tata Steel stock is trading at a six-month high after rising for five consecutive sessions. The stock has gained nearly 9% during this period. Analysts said that Tata Steel has come out of consolidation level and given today’s breakout given the current bullish phase.

The rally has been supported by its MD and CEO TV Narendran’s December 1 statement that Tata Steel will continue to invest in Odisha, which has 25 per cent of India’s total steel-making capacity. Narendran said the metals arm of the Tata group has already invested Rs 75,000 crore in the last five years. He made the remarks at the ‘Make in Odisha Conclave 2022’ in Bhubaneswar on December 1.

Meanwhile, the stock touched an intraday high of Rs 115 with a gain of 2.63% in the current trading session. Shares of Tata Steel were trading above 5 day, 20 day, 50 day, 100 day and 200 day moving averages. The stock is up 2.1% in one year and 2.7% in 2022. However, the stock has jumped 9% in one week.

read also,Tata Steel scrip closes above Rs 100 for 22 consecutive sessions, time to buy?

A total of 54.24 lakh shares of the firm saw a turnover of Rs 61.88 crore in the afternoon session. The market cap of the firm rose to Rs 1.40 lakh crore on BSE. The stock hit a 52-week high of Rs 138.63 on April 6, 2022 and a 52-week low of Rs 82.71 on June 23, 2022.

Analysts said the government’s move to withdraw 15 per cent export duty on steel products and iron ore also supported sentiment on the stock.

Vineet BolinjkarHead of Research, Ventura Securities said, “The government withdrew 15% export duty on steel products (which was earlier imposed in May 2022) to provide relief to the domestic steel industry and boost exports. Also, on anthracite Import duty concessions/PCI coal, coking coal, coke and semi-coke and ferronickel have also been withdrawn. Removal of export duty on finished steel is expected to boost revenue performance, while reduction in import duty on key input material Profitability is projected to improve. Both the cases are long-term positives for the domestic steel sector.”

“Although global steel demand is low and steel prices muted, low-cost production from India is expected to benefit from China plus 1 and switch production from high-cost Europe to low-cost India. Export volumes are Global steel demand and prices are expected to grow significantly, providing additional benefits to the sector. Being the largest steel producer in the already consolidated market of the Indian steel industry, Tata Steel is poised to There is potential for gains over time. The stock is trading at FY25 EV/EBITDA of 5.7X, which is lower than its long-term average of 6.2X,” said Bolinjkar.

read also, Export duty rollback: Can this give a lift to NMDC, Tata Steel, JSW Steel and other stocks?

Osho KrishnaAngel One, Senior Analyst – Technical & Derivatives Research, said, “Tata Steel has recently started gaining traction and broke its higher band of the consolidation channel, portending a bullish breakout. It has been supported by good volumes, which supports the bullish outlook. Counter. Moreover, the stock is moving towards a bearish trendline placed around Rs 116-118, and a decisive breach will only take place after rallying in the comparable period. Will trigger a fresh move higher. Meanwhile, the support base has shifted towards Rs 108, and the immediate resistance is hovering around Rs 116-118.”

Abhijeet Tips2trade has given a buy recommendation on the stock at Rs 106 level.

“Global recovery on account of marginal fall in inflation has led to relief rally in all metal stocks including Tata Steel. Currently, Tata Steel looks overbought on daily charts and investors should book profits at current levels. Buying only in near term. May start from Rs 106-106.35 levels for a target of Rs 121 in coming weeks,” said Abhijeet.

Mahesh ParkotTechnical research analyst with Bonanza Portfolio expects Tata Steel share to reach Rs 162.

“On the monthly time frame, firstly, the price has given a breakout of the 12-year high placed at 90.20 and successfully retested the level, indicating a bullish strength. has taken support with candlesticks engulfing the .21 exponential moving average which indicates a bullish setup in the counter. 50% Fibonacci retracement level of the last impulsive wave and the previous all-time high (90.20) Almost identical, which suggests immediate support for the price. Price is trading above the Ichimoku cloud and Stochastic RSI, an oscillator, also suggested a positive crossover which supports the rising strength. On the weekly time frame , price has broken a cup and handle pattern with bullish volume and daily RSI (14) is quoted at 73 which is supportive for long positions. Trend-based Fib Extension suggests target of Rs 162. The above technicals Depending on the structure, a long position can be initiated in Tata Steel.l 114 at the current market of Rs. On the upside, further decline in the price towards Rs 110 levels can be used as a buying opportunity for an upside target of Rs 162. 98 rupees,” said Prakot.

The firm reported a weak set of earnings for the quarter ending September 2022. Tata Steel’s September quarter consolidated profit fell 90 per cent to Rs 1,297 crore, hit by higher expenses. The Tata group firm had registered a profit of Rs 12,547.70 crore in the same quarter last year.

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