Due to Energy crunch and Power crisis, Tata Power stock prices have made solid gains in 2021 so far, it has rallied almost 192% since the beginning of this year. But from last few weeks we can notice that Prices are consolidating after testing the all-time high at 270.
When we look at the Price Action on a Weekly time frame, we can notice that Prices have rallied aggressively from 140. The consolidation which we are noticing right now is a liquidity response to that aggressive rally. Take a closer look at the Market Behavior on 1D Chart
Price Action Analysis of Tata Power on 1D Chart
Uninformed Traders who bought the Stock at the levels of 200 – 250 are trapped into the consolidation
Major Resistance zone is at 270; Price Action must clearly break and retest the prominent resistance zone to move higher. Right now prices are testing the minor support level at 215, a clear break on the support can push the prices even lower.
After making a stellar rally, we can expect some minor to intermediate correction in Tata Power Stock Prices for some time. Even the Spike in Bearish volume is indicating a similar scenario.
Traders who are sitting on solid gains can try to cut some exposure to the stock. A wise move is to watch the Price Action and wait for some clarity before taking any positions. I prefer to look for a strong momentum, before taking any trades.