Monday Watchlist: Why TATASTEEL Could Breakout This Monday? Analysis & Key Levels

TATASTEEL is making significant moves on Dalal Street, with the stock positioned for 3.31% to trade at ₹171.89 heading into next week.

⚡ The Trigger: What Drove the Move Heading into next week?

The sharp 3.31% rally in Tata Steel shares on Friday, December 12, closing at ₹171.89, was not a random fluctuation but the result of a specific fundamental catalyst hitting the wire mid-week. The primary driver is the company’s strategic acquisition of a 50.01% equity stake in Thriveni Pellets Private Limited (TPPL), announced on December 10, 2025. This deal, valued at approximately ₹636 crore, is seen by institutional desks as significantly margin-accretive, securing critical feedstock for the Kalinganagar Phase 2 expansion which was commissioned earlier this year.

Market sentiment has been further bolstered by fresh analyst coverage. Following the acquisition news, ICICI Securities revised their target to ₹188, while Motilal Oswal maintained a ‘Buy’ rating with a target of ₹210, citing improved long-term volume visibility from the Kalinganagar ramp-up. Additionally, the stock witnessed robust volume dynamics on Friday, emerging as one of the most actively traded counters by value on the NSE. The delivery volume data suggests genuine institutional accumulation rather than mere speculative intraday activity. The broader ferrous metals sector is also witnessing a cyclical upturn, but Tata Steel’s specific news flow regarding raw material security has allowed it to decouple and outperform its peers.

📉 Technical Setup & Key Levels

Technically, Tata Steel has executed a decisive breakout above its 200-Day Moving Average (DMA), which was hovering around ₹171.43. A close above this critical long-term trend indicator is a classic bullish signal, often inviting follow-up buying from algorithmic trading desks. The stock formed a strong green candle on the daily chart, closing near the day’s high of ₹172.50, indicating sustained buying pressure into the weekend.

However, traders must exercise caution as the Relative Strength Index (RSI) on the daily timeframe has entered overbought territory at approximately 79. While strong momentum often keeps RSI elevated (the “super-bullish” zone), it also increases the risk of a minor intraday pullback or consolidation before the next leg up. The immediate structure remains “Buy on Dips” as long as the price sustains above the previous resistance-turned-support zone.

Level	Price (₹)	Significance
Immediate Resistance	172.90 - 175.00	Friday’s High & Psychological Round Number
Immediate Support	167.00	Recent Breakout Zone & Short-term MA Support
Key Resistance	188.00	Major Swing High / Analyst Target Zone
Key Support	162.50	Critical Demand Zone (Previous Consolidation Base)

🆚 Peer Comparison

When benchmarked against its closest sector peer, JSW Steel, Tata Steel demonstrated superior relative strength heading into the weekend. While JSW Steel also posted gains, closing at ₹1,125.50 with a 1.82% rise on Friday, it lagged behind Tata Steel’s 3.31% surge.

The divergence in performance can be attributed to valuation comfort and specific catalysts. Tata Steel currently trades at a P/E multiple of approximately 31.5x, which appears more attractive compared to JSW Steel’s P/E of ~45x. Furthermore, while JSW Steel’s movement was largely largely beta-driven (moving with the sector), Tata Steel’s alpha was generated by the specific Thriveni Pellets acquisition news. This suggests that money flow is currently favoring Tata Steel as the preferred vehicle for playing the current steel cycle upturn. Both stocks are in an uptrend, but Tata Steel exhibits higher velocity and stronger news-based momentum for the coming week.

🎯 Analyst Verdict (Key Levels to Watch Monday)

Bullish Setup: The data structure for TATASTEEL heading into Monday is highly constructive. The confluence of a fundamental trigger (acquisition) and a technical breakout (crossing 200-DMA) creates a high-probability setup for continuation.

Breakout Trigger: Watch for a sustained move above ₹172.50 in the first 15 minutes of trade. If the stock holds this level with volume support, it opens the door for a test of the ₹175.00 zone.

Caution: Given the RSI is at 79, aggressive chasing at the open is risky. The ideal entry is on a retest of the ₹170-171 zone, treating the 200-DMA as a dynamic floor. Avoid fresh long positions if the stock slips back below ₹167, as this would invalidate the immediate breakout and suggest a “fake-out” scenario. Institutional flows will likely support the stock as long as it trades above ₹167.