With the Nifty Metal index scaling new lifetime highs on China's reopening of its economy, Tata Steel NSE-2.28 %'s 6% rally yesterday has taken the stock to a breakout level above the 6-month range, indicating a revival of the positive trend.
Chart readers say Tata Steel signals resumption of up move and offer fresh entry opportunity. ICICIdirect has a target price of Rs 127, an upside potential of 10% on the stock.
"Tata Steel's share price has formed a strong base around Rs 100 over the past few months factoring in a host of negatives," the brokerage said, adding that the share price is seen resolving out of six months base formation, which resembles a cup and handle bullish formation.
ICICIdirect expects the share price to head towards Rs 127, which is an 80% retracement of the April-June 2022 decline (Rs 138-83) over the next few months while strong support is placed at Rs 98.
Among oscillators, the weekly RSI has generated a bullish crossover recently, thus validating the positive bias.
