Good Evening!
We have received a stock query from Mr. Hukumat Nathwani. He wants
to know what are the prospects of Tata Steel?
Here is my view on Tata Steel.
Fundamentally and technically Tata Steel is looking weak.
This is one of the stocks which I used to track very closely till a year back.
I would like to highlight one important factor here, to my experience I have
seen technical studies turn first followed by the fundamental factors; this is
one of the reason why I focus more on technicals and not purely going by
fundamentals. There is always a difference of opinion between technical
analysts and fundamentalist on which one is supreme school of thought, however
I believe to earn money from markets you should have through understanding of
both the sciences.
Let’s get back to Tata Steel. During the month of May, 2014
when this stock broke out on the positive side, I considered it to be the best
buy. However the beauty of technicals is this, it can only initiate a trend but
if it has to be a good bet, it should be backed up by changes in fundamentals
of the company. Tata Steel’s fundamentals failed to give a better picture and
hence the stock turned bad during the month of December 2014. Now if you look
at it, both fundamentals and technicals do not support to buy or hold on to
this stock.
Technically, this stock might
see a dead cat bounce towards 333, however if this happens this should be taken
as an opportunity to exit. The reason is simple, if the technicals and
fundamentals has to change for this company, it would take a minimum of 2 years
and that is also not a definite thing to happen. Since we are in a multi month
bull run, we have much better stocks to make money from the market.
On the pipeline for askpathiyil, we have a query on FT, IDFC
and a list of portfolio. I will be answering by this weekend. If you have any
stock query please write to me at askpathiyil@gmail.com
Thank you. Happy Learning!
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