Tata Steel share price could touch 52-week low again and then take support from lower levels. The stock is looking bearish on technical charts and we can expect further selling on the counter. Tata Steel closed 1.4 percent lower on Tuesday after touching intraday high at Rs 132.4. The stock has strong support around yearly lows at Rs 122.
Tata Steel, one of India's largest steel producers and a global leader in the industry, is trading in a range of Rs. 129.25 to Rs. 132.40. With a market capitalization of Rs. 1.62 lakh crore, a P/E ratio of 55.15, and an attractive dividend yield of 2.77%, the stock remains a preferred choice for investors in the metals sector. Although it has retreated from its 52-week high of Rs. 184.60, it remains above the 52-week low of Rs. 122.62. TopNews Team explores Tata Steel's performance, technical indicators, and its position relative to competitors like JSW Steel and SAIL.
Tata Steel's steady dividend yield and strong market presence underscore its value proposition, even as its valuation appears stretched with a high P/E ratio compared to peers.
The daily candlestick chart for Tata Steel shows a Bearish Engulfing Pattern, where the closing price dipped below the previous day's low. This signals potential selling pressure, particularly as the stock approaches critical support levels.
Investors are advised to watch for follow-through confirmation of this bearish pattern in the next trading sessions.
Using the 52-week high (Rs. 184.60) and low (Rs. 122.62), the Fibonacci levels are calculated as follows:
Key Insight:
Tata Steel is trading below the 23.6% Fibonacci retracement level (Rs. 138.26). A recovery above this level could signify renewed bullish momentum, while sustained trading below Rs. 129.25 may lead to further downside.
Support: Rs. 129.25
Resistance: Rs. 132.40
Trading Strategy:
A breakout above Rs. 132.40 may push the stock toward the 23.6% retracement level at Rs. 138.26.
A breakdown below Rs. 129.25 could target the 52-week low at Rs. 122.62.
ICICI Direct in its January 2025 report rated Tata Steel as a "Hold," citing a target price of Rs. 150. The report emphasizes the company's stable dividend and robust global footprint but notes margin pressures due to volatile raw material prices.
Motilal Oswal issued a "Buy" recommendation in December 2024 with a target price of Rs. 165, driven by expectations of steel demand recovery in global markets.
Short-Term Traders:
Look for a breakout above Rs. 132.40 to confirm bullish sentiment.
Use Rs. 129.25 as a stop-loss for downside protection.
Long-Term Investors:
Tata Steel's strong position in the global market and consistent dividend yield make it a solid long-term investment. Accumulate on dips, targeting Rs. 150 to Rs. 165 over the next 6-12 months.
Risk Factors:
Rising input costs (coal and iron ore) could impact profitability.
Global steel demand remains subject to macroeconomic uncertainties.