Tata Steel Price Analysis: Critical Pullback to ₹145 or a Rally ? Must-Watch Levels & Trading Strategy

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Why Tata Steel May Pull Back Before Moving Higher

Tata Steel has recently caught the attention of traders after breaking a long-term descending trendline on the daily chart. The price has managed to move above key moving averages — the 50 EMA and the 200 EMA — signaling a shift toward bullish sentiment. However, a closer look at the chart suggests that this rally might need to cool off before making its next move.

 1. Trendline Breakout With Weak Volume Confirmation

After breaking the trendline, the price rose from ₹135 to ₹153. However, volume declined during this rise, signaling weak buying interest. A breakout without strong volume often lacks sustainability and hints at a likely correction.

2. RSI Overbought Condition

The RSI stands at 73.35, deep in the overbought zone. Combined with falling volume, this indicates an increased chance of a short-term correction before any further rally.

3. Potential Pullback Zone

The support zone between ₹145–₹146 is crucial due to:

  • The presence of the 200 EMA

  • Prior price consolidation

If the price struggles below ₹155, this zone could be tested.

4. Future Scenarios

  • Above ₹155 with strong volume: Possible rally toward ₹168–₹170.

  • Failure to sustain above ₹155: Likely retracement to ₹145–₹146, offering a re-entry opportunity.

5. Conclusion

While the breakout looks promising, declining volume and an overbought RSI suggest caution. A healthy pullback to ₹145–₹146 can be the best opportunity for positional traders.

Pro Tip: Wait for price action signals near support or volume-backed breakout above ₹155 before entering trades.

Frequently Asked Questions (FAQ)

Q1. Is Tata Steel a buy now?
Wait for confirmation. Either buy on a breakout above ₹155 with volume or on a pullback near ₹145–₹146.

Q2. What is the immediate support for Tata Steel?
₹145–₹146 zone, aligned with the 200 EMA.

Q3. What is the next upside target after ₹155?
₹168–₹170, if volume supports the breakout.

Q4. Is the current RSI a concern?
Yes, RSI at 73.35 suggests overbought conditions; caution advised.

Q5. How to trade Tata Steel in the short term?
Either enter on pullbacks to support or after a breakout with volume above ₹155.

 

Location: India

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