Tata Steel shares rise for fifth session, hit 52-week high; where is the stock headed?

Shares of Tata Steel Ltd hit a fresh 52 week high today, with the Tata Group stock rising for the fifth consecutive session. The Tata Steel stock has risen 10% in the last five sessions. The Sensex stock, which ended at Rs 116.90 on August 25 hit a 52 week high of Rs 128.60 in the current session. The Tata Group’s metal stock hit an intraday high of Rs 128.60, rising 4.55% in early deals on Friday. The metal stock has gained 7.30% this year and risen 20.20% in a year. Total 44.27 lakh shares of the firm changed hands amounting to a turnover of Rs 56.21 crore. Market cap of the Tata Group firm rose to Rs 1.56 lakh crore.     

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In terms of technicals, the relative strength index (RSI) of Tata Steel stands at 65.1, signaling it's neither trading in the overbought nor in the oversold territory. The stock has a beta of 1.2, indicating high volatility in a year. Tata Steel shares are trading higher than the 5 day, 10 day, 20 day, 30 day 50 day, 100 day, 150 day and 200 day moving averages.        

Here’s a look at the outlook of the Tata Group stock.     

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Aditya Gaggar Director of Progressive Shares said, “Tata Steel Ltd has given a breakout from the Symmetrical Triangle Formation in the monthly time frame. The leading momentum indicator RSI replicates price activity while the trend-following indicator MACD has given a positive crossover and ADX also suggests building up the momentum. Recently, the stock has given a breakout from another pattern known as the Cup and Handle formation. The stock has given a breakout from the Symmetrical Triangle Formation. RSI oscillator replicates price activity. The stock is about to start its trend as ADX stands at 19.75. As per symmetrical triangle breakout, the target comes to Rs 172. One can add the stock on declines to Rs 117."     

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Abhijeet from Tips2trades said, "Tata Steel is bullish but also overbought on the Daily charts with next resistance at  Rs 129.65. Investors should book profits at current levels as a daily close below the support of  Rs 123 could lead to a target of  Rs 114.5 in the near term." 

Prabhudas Lilladher has initiated coverage on the stock with a buy call.    

"We initiate coverage on Tata Steel with 'Buy' rating and SOTP based target price of Rs 137. We believe Tata Steel India is well placed to capitalise on strong volume growth expected in domestic steel markets, while Tata Steel Europe (TSE) is at an inflection point as UK decision is nearing," said the brokerage.    

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Riches Vanara, Technical and Derivatives Analyst, StoxBox has assigned a sell call with a target price of Rs 112-108. One can fix the stop loss at Rs 123.     

"Tata Steel is trading in an ascending triangle pattern since June month and it has reversed facing resistance from the upper end of the said pattern and a follow up selling candle is seen. We feel it’s a sell candidate as MACD indicator is also showing some sign of bearishness. Hence, we recommend to sell at current levels and around Rs 119 for targets of Rs 112 and Rs 108 with stop above Rs 123," said Vanara.     

Mileen Vasudeo, Senior Technical Analyst at Arihant Capital Markets has a sell call on the stock. He has assigned a target price of Rs 107-102 with a stop loss of Rs 122.    

“Tata Steel is making a lower-top lower-bottom formation on the daily chart, which is a sign of weakness. The stock has a good support at Rs 115 level, its 50-day SMA. If this level is breached, the stock may see downside momentum. The momentum indicator viz MACD is negatively poised. One can sell the stock at current price with a stop loss of Rs 122 for a target of Rs 107-102 levels in the couple of weeks,” said Vasudeo.    

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Tata Steel on July 24 reported a 92% year-on-year decline in its Q1 consolidated net profit (attributable to owners of the company) to Rs 633.95 crore against a profit of Rs 7,764.96 crore in the year-ago period. Consolidated net profit slipped 63% from Rs 1,704.86 crore in Q4FY23.

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