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Stock of the week

Observation

* The NIFTY METAL Index is moving higher after a 3 week long correction.

* TATASTEEL has been one of the strongest outperformer among the Steel space. In the week that passed by the stock ended with a gain of 11.88%.

* This up move was backed by above average volume, indicating participation as the prices move higher.

* On the indicator front the RSI (67.94) plotted on the weekly time frame can be seen placed above the 55 mark and moving higher, indicating expanding bullish momentum on the medium term.

* The long term moving averages in the daily time frame are as follows 50 Day SMA (667), 100 Day SMA (528) and 200 Day SMA (436). Currently the prices are placed above all the major averages.

* The immediate resistance for the stock is placed at 731-744 (Recent swig high and 38.2% extension level of the rise from 342-731 projected from 594) followed by 780 (50% extension level of the rise from 342-731 projected from 594) and eventually towards 824 (61.8% extension level of the rise from 342-731 projected from 594).

* The key level to watch for on the downside are 650(Daily low) followed by 600 (Support cluster).

Inference & Expectations

* TATASTEEL seems to be starting the next leg on the upside after witnessing a correction.

* The bar pattern analysis and the technical parameters mentioned in the observations all point towards the possibility of the stock moving higher.

* Going ahead we expect the stock to move higher towards 731-744 immediate, if the prices sustain above this level we might see the prices move higher and test the 780 followed by 824 mark.

* Our bullish view will be negated only if the stock closes below the 651 mark, beyond which we might see the prices move lower towards 600 mark

TATASTEEL: 685.05 weekly change (13.99%)

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