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Tata Chemical – Is the stock in a down trend, is the stock staring at a bigger fall??

Tata Chemicals is an 8 decade old commodities company with interests in soda ash, salt and specialty chemicals businesses. It has a diversified portfolio of businesses: (a) soda ash and sodium bicarbonate, where it is the second largest producer In the world, , (b) agricultural inputs, through subsidiary, Rallis India where it offers a complete suite of solutions for the Indian farmer and touches over 85 percent of India’s arable land, (d) consumer products such as branded iodized salt, pulses and spices, and (e) a fledging specialty products business – materials such as highly dispersible silica (HDS) and nanomaterial, and nutritional products like oligosaccharides and polyols.

Tata Chemical

Tata chemical consolidated for more than a year between 653 and 789 and then broke down in second week of Oct-18. The stock made the highs around 788 three times. That the stock broke the support at 653 was the first indication of weakness.In the process the stock made a new low at the Fibonacci confluence zone of 616-627. The stock then retraced the fall all the way to 724 levels. The 724 level is the 61.8 % of the fall from the highs. Thus in the process the stock made a lower high and is back to an important support today. The stock has a Fibonacci confluence support at 653-568 and also a trend line support in the same zone. Since the stock could not go beyond the 61.8% of the fall it confirmed that the stock was turning bearish. The RSI is now breaking the 40 zone and that again means weakness. A break of the 653 levels on a weekly basis will open the door to 616 and then 570 both being Fibonacci confluence zone and hence a good support for the stock. The stock is  indicating that the trend of the stock is turning down and  hence any rallies in the counter should be utilized to exit.

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