The stock has been correcting for the last four quarters. It fell 22 per cent in the last week alone when the realty funding scam was exposed. There is a strong bear grip on the stock. There are no accumulation patterns or signs of a trend reversal. A dead cat bounce is possible. Sell in a staggered way.

The stock has been range bound between 600-750 in the last four quarters and has underperformed the markets. The stock’s outlook is negative over the medium term but it is a hold in the long term.The future outlook of the steel industry is good and the company is doing well. But the company’s outperformance comes from the power side where the company has done exceedingly well.

The stock is trading below its 200 day moving average. The uptrend seen in the stock in the last 6 quarters has been threatened. All the oscillators are in the negative and there are no signs of a bounce back.The stock is being driven by news flow so buy in a staggered manner. The valuations are cheap. The FY11 earnings estimates are Rs. 85.

Shares of the company gained Rs 55.1, or 2.62%, to settle at Rs 2,155.15. It touched a high of Rs 2,192 and a low of Rs 2,097. It is learnt that the company may offer a minority equity stake to a third technology partner in its proposed joint venture with Steel Authority of India (SAIL) to manufacture high-grade steel.

The momentum indicator like MACD indicates further weakness in the counter and a bounce till 2300 should be used to liquidate long position. Further correction in market could add fresh selling pressure in the counter which could drag the counter to its 200 DMA of 1920 level.

For All Stock Future tips, nifty future tips , stock option tips & intraday tips please check our stock tips page. We will give you all stock F&O Tips , nifty trend and other market Information.