Commodity and Energy stocks have been one of the worst performers post 2008 crisis. Tatasteel also had been a strong underperformer and few months back it came close to the low formed in 2008. But is this underperformance near completion?
A trader or investor should be open to the fact that news do not drive the prices higher of lower. But people tend to find logical news fitting the puzzle post the move has happened.
Tata Steel also showed strong recovery after flirting around 200 mark as the trend was due to reverse. Look at the below chart:
Tata Steel daily chart:
Wave analysis: The below research is picked up from “The Financial Waves short term update”
There was positive news for the steel sector today - India has extended safeguard import taxes on some steel products until March 2018, a government order said on Wednesday, as it looks to curb imports of cheap Chinese steel and shield domestic mills.
It seems logical to justify the up move in metal stock after the positive news. However, Metal stocks like Tata steel has been already in uptrend for many weeks even before this news came out.
The daily chart shows that prices have competed Triple standard correction pattern at the low of 210 level in the month of February 2016 and post that we are witnessing impulsive rise in this stock which is the bullish sign. It is very rare to see impulsive rise in Metal stock as few months back this sector was the most underperforming one. This increases the odd that medium term trend may be reversing on upside. We will obtain medium term positive confirmation in Tata Steel once prices move above …… level. For now as long as prices sustains above the important support of ………. level trend will be positive.
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