Shares of the company dropped about 5 per cent to Rs 1,300 on Monday, taking its fall to 12 per cent in the last four days. It had hit a recent high of 1,476 on September 14.
The stock is the first multibagger of the year from Nifty50 club. Tata Steel’s year-to-date returns still stood at 105 per cent. Amid a boom in the entire commodity basket, the prices of metals like steel, aluminum and copper have increased significantly on higher demand.
But now some analysts say this growth in demand may moderate. This will also result in consolidation in global steel prices. Due to this, steel counters have started consolidating in the last couple of weeks.
Technical analysts are also seeing many negative signals for the scrip.
“Tata Steel was one of the worst performers which has confirmed a trend line breakdown from its key support of Rs 1,390 on a closing basis. Traders can look to short this counter on a small bounce for a short-term target of Rs 1,330. A stop loss can be placed at Rs 1,442,” said Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel Broking.
Fundamental analysts, though, are still bullish on long-term performance of Tata Steel. A vast majority of 29 analysts that track the stock have given either ‘buy’ or ‘strong buy’ recommendations.
The median 1-year price target for the stock is at Rs 1,793. Analysts have a high estimate of Rs 2,200 and a low estimate of Rs 767 on the stock.
