Tata Motors is about to move to ₹1,400 mark after witnessing a breakout, according to a Technical Analyst. Other analysts see the stock having momentum to reach past ₹1,200. The stock has surged 4% on Tuesday and gained 15% in the last five trading sessions.
What Happened: Analysts said the recent movement in Tata Motors after the consolidation in the stock has created enough potential momentum for the stock to reach new heights.
Anshul Jain, head of research, Lakshmishree Investment said, “Tata Motors has broken out of a 98-day flat base formation on the daily charts at 1065, following the demerger news. The flat base exhibited a visible range with 921 on the lower side and 1065 on the upper side. The breakout occurred on significant volumes, indicating strong bullish sentiment.
“This pattern suggests an immediate upside towards 1400 levels. The robust volume during the breakout reinforces the strength of this move, and the demerger news adds further positive momentum. Investors should watch for the stock to test the ₹1400 level, as the technical indicators and recent developments signal continued upward potential for Tata Motors.”
Jigar Patel, senior manager, technical research analyst, Anand Rathi Shares and Stock Brokers said the stock has broken out of its consolidation phase and is moving towards the ₹1200 mark.
“In the previous trading week, Tata Motors experienced a notable breakout after a prolonged consolidation period of around five months. This movement signalled a significant change in market dynamics, as the stock surged and is now trading around the ₹1150 mark.
“The breakout indicates increased investor confidence and a potential new upward trend. Looking ahead, any minor pullbacks in the stock price could present buying opportunities, as these dips may allow investors to enter long positions. The support level is expected to be around 1060, providing a cushion for the stock, while resistance is anticipated near the ₹1200 mark, which could act as a ceiling for further price advances.
“Additionally, the weekly Relative Strength Index (RSI) is positioned at approximately 71, indicating that the stock is in a strong bullish phase. The elevated RSI further reinforces the positive sentiment around Tata Motors, suggesting that the stock may continue its upward trajectory” Patel said.
Rupak De, senior technical analyst, LKP Securities said, “Tata Motors continues to move higher following a breakout from a falling channel on the daily chart. The positive crossover in the weekly RSI is boosting the upward momentum of the stock. In the short term, the stock might move towards 1220, with support placed at 1070. While the short-term trend is positive, a “buy on dips” strategy might be preferable after the recent sharp rally in the stock.”
The recent rally has powered Tata Motors past the ₹4 lakh crore market cap. The company also took the crown of leading automaker in India from Maruti Suzuki.
The company is set to announce its June quarter results on August 1 with revenue expected to rise to ₹1.08 lakh crore.
Price Action: Shares of Tata Motors rose 4.89% to hit all time high at ₹1179 on Tuesday.
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