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Tata Steel Share Price On A Roll, Targets New ATH

Tata Steel share prices rose to new record highs on Tuesday, after gaining 0.92% to reach Rs 165.50 before declining marginally to trade at Rs. 164.65 at the time of writing. TATA is on course to register a seventh straight day of gains, with high global steel prices providing support. TATA steel’s decision to detach from its loss-making UK arm has greatly improved its profit-making potential in 2024, considering that the Port Talbot plant made losses amounting to up to £1.7 million a day.

Tata Steel estimates that its capital expenditure in the 2023/2024 financial year will rise to $1.95 billion, with a notable expenditure going toward its newly-acquired subsidiary, Neelachal Ispat Nigam Limited (NINL). The acquisition will enable the company to expand its capacity in the hot and cold rolled coils product segment.

The company’s European operations have run into headwinds in 2024, and this has seen it take steps to cut its losses. Key among these measures are the job cuts in the Netherlands and the UK. The company announced in January that it will shut down its two blast furnaces at the UK’s Port Talbot plant, by the end of the year. The move is expected to lead to the loss of 2,800 jobs. However, this has not sat well with trade unions, which could precipitate a confrontation. Elsewhere, in the Netherlands, the company announced in March that it would switch off 3 welding lines and 2 sawing machines to reduce the overcapacity in its precision tubes plant. That will result in the loss of 120 jobs.

Technical analysis

TATA is pivoting at 161.00, and will need to stay above this level to maintain the upward momentum. The buyers will meet resistance at 165.60, but a move past that mark could propel movement to test the psychological level at 170.00. However, a move below 161.00 will signal control by the sellers, with support coming at 156.35. Continuation of control by the sellers at this point will likely break the support and invalidate the upward narrative. The next target on the downside will likely be at 153.20.