Tata Steel shares delivered negative returns in two years; what should investors do?

Shares of Tata Steel Ltd have delivered negative returns to shareholders in the last two years.  Shares of India’s largest steelmaker closed at Rs 131.67 on October 29, 2021. In the current session, the Tata Steel stock was trading at Rs 119.25, falling 9.43% during the period.  

Tata Steel stock closed on a flat note at Rs 119.9 in the previous session.  

On the other hand, Tata Steel stock has turned risen 17.48% in the last one year. However, Tata Steel shares have clocked flat returns on a year-to date-basis. The stock has gained just 0.04% in 2023.

The Tata Steel stock is neither oversold nor overbought on technical charts with its relative strength index (RSI) at 36.2. The Tata Group stock has remained highly volatile in a year with a beta of 1.2.  

Shares of Tata Steel are trading lower than the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day but higher than the 150 day and 200 day moving averages.  

In the current session, Tata Steel shares were trading flat at Rs 119.40 on BSE. Tata Steel stock touched an intraday low of Rs 119.95 and an intraday high of 121.25. Market cap of Tata Steel stood at Rs 1.45 lakh crore on BSE. Total 8.44 lakh shares of the firm changed hands amounting to a turnover of Rs 10.08 crore on BSE.   

Tata Steel stock hit a 52 week high of Rs 134.85 on September 18, 2023 and a 52week low of Rs 98.15 on November 1, 2022.  

Tata Steel stock has clocked a loss of 11% for its shareholders from 52-week high in nearly 1.5 months. It has gained  22% from the 52 week low hit last year.  

Here’s a look at what brokerages and analysts said on the outlook of Tata Group stock.  

Aditya Gaggar, Director of Progressive Shares said, "The metal heavyweight stock is in the Ascending Channel (Higher Top Higher Bottom Formation) but the trend-following indicator MACD has given a negative crossover in the weekly timeframe which indicates a continuation of the current corrective move. Considering a long-term trend, one can buy the stock at the lower end of the channel which is around Rs 115 (which converges with 50WMA support) for a target of Rs 145." 

Religare Broking has a target of Rs 140 for the Tata Group stock. “In line with other metal majors, Tata Steel has formed a fresh buying pivot, after marginal retracement from its recent high.  We believe this dip is an opportunity for those who missed the chance earlier and expect a steady rebound from hereon.  One can buy the stock in the range of Rs 127.50-128.50 with a target price of Rs 140 and a stop loss of Rs 122,” the brokerage said in a note.   

ICICI Securities has maintained an add call to the stock with a target price revision to Rs 150 from the earlier Rs 135.      

"The development around Tata Steel UK is likely to ensure the future readiness of the business from both profitability and ESG perspective. We expect both additional restructuring costs  and  policy  support  as  consultation  process  picks  up. Taking cognizance of  better  operating  prospects  of  Tata  Steel UK and  reduced  support  from  the parent, we raise our valuation multiple to 6x (earlier 5.5x),resulting in a revised target price of Rs 150 (earlier Rs 135). Maintain ADD rating on Tata Steel stock,” the brokerage said.      

Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher expects Tata Steel stock to hit the target of Rs 150 level.   

"Tata Steel stock has resistance near Rs 135 zone and it's cooling off to some extent with near-term support at Rs 123 level. A decisive breach above Rs 135 zone shall trigger a breakout with next expected target of Rs 145-150 levels," said Parekh.    

Mileen Vasudeo, Senior Technical Analyst at Arihant Capital Markets suggested a hold stance for the Tata Group stock. One can fix a stop loss of Rs 118 for a target price of Rs 139-145.    

"On the daily chart of Tata Steel, we are observing a sideways move and are giving no clear direction of trend. At present, the stock has good support at Rs 122-120 level. Even the momentum indicator, RSI is trading sideways. However, the stock is outperforming the benchmark indices. Hence, one can hold the stock at current levels with a stop loss of Rs 118 for targets of Rs 139-145 levels in the next couple of weeks," said Vasudeo.   

 Abhijeet from Tisp2trades said, “Tata Steel is bearish on the daily charts with strong resistance at Rs 123.4. A daily close below the support of  Rs 117.5 could lead to a fall till Rs 111 in the near term. Investors should buy only if Daily close is above Rs 123.4." 

Pravesh Gour, Senior Technical Analyst at Swastika Investmart was of the view that one could hold Tata Steel for a target price of Rs 142. Stop loss of Rs 123 should be fixed.    

"Tata Steel witnessed a breakout of a triangle formation on the daily chart. It retested its previous breakout and started a new leg of rally towards Rs 135 level. The overall structure looks good for short-term trade as it is trading above its key moving averages. On the higher side, Rs 135 is the susceptible level; above this, Rs 142 is the near-term target for the counter. Place a stop-loss at Rs 123," said Gour.    

 

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.    

 

 

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