Technical Outlook Of Tata Steel

Tata Steel (CMP:385) is another under performer in NIFTY-50 last year.

For Tata Steel, 371 is now a strong support zone & immediate target could be 425/448/492 area.
In the medium term (6-12 months), it could scale 560-580 zone (provided it sustained above 435) & in the long term (12-24 months), it could run up to 625-685 zone. But, for this Corus debt book has to be also streamlined.

Pros:

• Recent interim order of Odisha & Jharkhand High Court regarding resumption of mining.
• Domestic theme & possible high consumption.
• Input costs reduction possibility due to key iron ore mines to be on stream in the next few quarters.
• Gradual recovery in EU will improve demands for metals.
• Strong USD against EURO.

Cons:

•  Recent China Growth fear (but to day China GDP growth printed as 7.3% & IIP @ 7.9%, which is above estimates).
• Dumping of steels from CIS countries & China at lower prices.

Re-rating of the stock may be on card.