The previous few trading sessions have been bearish for Tata Steel Limited as we can see from the charts. The stock has fallen below the L4 support level of 271.65 for June 2013 which is a bearish signal with 255 as the next target.
Wolfe wave analysis also depicts a similar picture and a drop to around 240 levels is not unexpected. EMA crossovers also do not show any sign of recovery for the stock.
Looking into derivatives data we notice that there has been heavy call writing today across various strikes which is yet another bearish trigger for the stock.
A steep rise in open interest of June futures along with a decline in price is depicting new shorts being opened.
Traders may short June futures and expect some drops in the next few sessions.