NSE: TATASTEEL, with a current market price of 1034, the stock has risen over 312% from the slumps of March 2020, is it time for a quick retracement?
The iron & Steel Sector has been shining brightly from the beginning of this year. Since the market recovery of March 2020, Tata steel stock prices are in a Structural uptrend, the sharp rise has broken all the previous highs.
The Stock prices corrected for nearly 20%, twice in the last 12 months, but rebounded back each time indicating the strength of Buyers in the Uptrend. The prices fell, took support and then rebounded up. These turned out to be minor pullbacks that offered an excellent opportunity for Trend traders.
Tata Steel (NS:) Price Action Analysis on 1W Chart.
And now the stock is trading above its lifetime high of Rs. 901 since December 2007. As per the current situation, the trend looks a little riskier for taking new trades. The probability of a retracement is high.
The stock prices might take a dive and we might see some distribution of shares from large buyers. Prices could retest the previous Breakout levels around 800.
On the other hand, we are seeing a rising trend in volume. It indicates the increasing positions of Market participants. Mostly these have to be Uninformed retail traders trying to buy the stock at all-time highs, expecting a further increase in stock prices. They’re most likely to get trapped!
Based on the observations we can say that stock prices might undergo a retracement first and it might continue the uptrend.
Another important fact to consider is that we might see High volatility in the Price action due to upcoming fundamental reports. The company is expected to submit its financial results and earnings reports, this month. Apart from Trading at peak levels, this is another reason to expect Smart institutional investors to liquidate some of their positions from the Stock.
In either case, we can expect some interesting trading opportunities in Tata Steel in the upcoming weeks. Put the stock on your watch list and keep an eye on the Price Action.