Tata Steel stock falls to 52-week low, should you buy the dip?

Shares of Tata Steel fell to a fresh 52-week low in a volatile market today. Tata Steel stock touched a low of Rs 987.65, down 0.5 per cent against the previous close of Rs 992.70 on BSE.

The Tata Group stock hitting fresh low may make it look an attractive buy but experts have called for adopting a cautious stance amid volatile market conditions.

Shares of Tata Steel are trading lower than 5-day, 20-day, 50-day, 100-day and 200-day moving averages. Later, the stock was trading in the green. The large cap stock rose up to 2.12 per cent intraday to Rs 1,013.75 on BSE. The stock has gained after three sessions.

At 2:47 pm, the Tata Group stock was trading 0.11 per cent higher at Rs 993.80 on BSE.

Total 3.93 lakh shares of the firm changed hands amounting to a turnover of Rs 39.41 crore on BSE. Market cap of the firm stood at Rs 1.21 lakh crore on BSE.

The stock hit a 52-week high of Rs 1,534.60 on August 16, 2021.

Here's look at what experts said on the outlook for the stock after it touched its 52-week low.

AR Ramachandran, Co-founder & Trainer, Tips2Trades

"A slowing global economy fuelled by the Russia-Ukraine war & highest inflation in decades has led to an abrupt end to the great commodity bull cycle including steel & the other base metals.

This has led to metal stocks in India down by atleast 18-20% from their October peak including a heavyweight like Tata Steel. Technically, till Tata Steel doesn't close above 1018, we could see lower dips till 930 in the coming days."

 Tirthankar Das, Head of Technical Research, Ashika Group

"The metal Index for the last two months had been on a corrective decline and in that space Tata Steel continues to underperform with a decline of more that 25%. On the technical front trend clearly remains in favour of the bears with consecutive lower low formation. Among oscillator the daily 14 period RSI has recently generated a sell signal with neutral to oversold price reading of 36 (Weekly time frame) indicating room for further downside. However, on the daily time frame presence of Class A positive divergence might ignite a meager pullback. Presence of Harmonic 'White Swan Sea Pony' since the start of FY22 also indicates the same. Prices presently trading below the 38.2% retracement of the entire rally since Mar'20 (High: Rs 1535; Low: Rs 251), hence next crucial support level is seen at 900 (50% retracement). For traders, short pull back can be expected but sustainability remains doubtful. Short- and longer-term outlook will only change to positive if prices provide a sustained close above the previous support turn resistance level of Rs 1080- Rs 1100."

Ravi Singhal, Vice Chairman, GCL Securities Limited

"After the results were released, the government reduced import duties, which impacted more margins in the upcoming quarter results. We believe it can go up to Rs 800 levels, but those levels are excellent for investing."

 Manoj Dalmia, founder and director, Proficient Equities Private limited

"Tata Steel is trading at Rs 997. The stock might plunge to further levels due to export duty on steel, inflation, and increasing interest rates globally as the steel industry is highly leveraged the debts might become costlier leading to higher interest expense. We expect the stock to reach Rs 885 and Rs 837 levels on the downside which can be a good place to accumulate. Investors should avoid heavy buying as of now due to bearish sentiments in markets."

Ravi Singh, vice President and head of Research, Share India

"Tata Steel has delivered steady profit numbers despite Covid complexity and geopolitical tensions. Its EBITDA stood well above the industry benchmark. The company's free cash flow is also posting confidence on its future performance. On technical setup also, Tata Steel stock is showing accumulation and value buying may trigger around Rs 900 levels. Investors may take positions around Rs 900 levels for a long term target of  Rs 1150."