Tata Steel

Tatasteel has been extremely volatile stock in the past. It has outperformed the index in 2015 downtrend as well as the current upmove. The stock corrected more than 60% from its high of 575 made in July 2014 to low of  200 made in August 2015. The stock then consolidated for nearly 6 months in the range of 200 to 270 before breaking out in March 2016 to move nearly 80% from low of Aug. 2015 to 362 in April 2016.

Now if we look at the above chart, we can can see that Tatasteel has been consolidating above support zone of 310-315 for almost 2 months now. This 310-315 zone is a support turned resistance & resistance turned support zone as marked in the above chart by a horizontal lone. When a stock consolidates above support zone, it usually moves further up. So we can assume that Tatasteel is a good candidate to move higher.
Now where can the stock move? There is a strong resistance zone around 385 as marked in the chart by another horizontal line. The stock looks to be going to that resistance zone now or even higher towards 425. So we recommend going long in the stock with a medium term perspective for targets of 385 & 425 with a stop of 305 on daily closing basis. 

Weekly Nifty Update!

Last week, I mentioned that 7980-8040 is a strong support zone for nifty. As expected nifty moved towards the zone & then reversed from 8060 levels & gave weekly close of 8170.

As mentioned in the last report, nifty looks to be in short term correction. This correction can take form of a downtrend or a sideways trend. Resumption of uptrend towards 8390-8420 should start only if nifty closes above 8240. If nifty closes below 7980 we can say that this correction has taken a form of downtrend & should go towards 7790. 

For entire last week, nifty was trading in the range of 8060 to 8215. This indicates nifty might be in a sideways correction. Midways lying momentum indicator also supports the view. So unless nifty moves above 8240 or below 7980, buy near lows of the range or sell near highs of the range should be the strategy for the week.

Nifty update

In my last post I mentioned that break of 8045 should take nifty to 8150. Nifty not only reached 8150 but broke it & almost reached 8300.

Although the index reached almost 8300, it was not able to break 8300. in fact nifty gave consecutive 3 negative close from high of 8289. 

Currently nifty looks to be in short term correction. This correction likely to take nifty to 8040. 7990-8040 is a strong support zone for the index. Nifty had moved above this zone after 4 attempts. If nifty sustains above this zone it should move higher towards 8380-8420. Break below 7980 can take nifty to 7800. So bulls should keep 7980 a stop for their long positions & bears should keep 8040 as a target for their short positions.