Why These Tata Group Shares Raced Upto 9% On The Bourses

Shares of Tata Elxsi and Tata Investment Corporation jumped 6% and 9% respectively on Tuesday.

What Happened: Although there is no specific development to attribute the rise of Tata Elxsi’s rise, experts thinks the stock is moving out of its consolidation zone and is gearing up for an upmove.

Tata Elxsi’s shares have underperformed the year so far, declining by 8%. The sectoral index Nifty IT on the other hand has surged 16% in the same period. Tata Elxsi’s shares have gained over 14% in the last five trading sessions.

Tata Investment Corporation has fared much better compared to Elxsi, giving a return of over 56% in the year so far.

Jigar S Patel, senior manager – technical research analyst, Anand Rathi Shares and Stock Brokers said Tata Elxsi has moved out of its consolidation phase and could see an upmove in the coming weeks.

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“Tata Elxsi has been trading within a tight range of 6900 to 7300 for several weeks, indicating a period of consolidation. This consolidation phase is typically characterized by low volatility, as traders await a decisive move in either direction. Recently, the market has broken out of this range and sustained levels above 7300, signaling a potential trend reversal or continuation of a bullish trend. This breakout is significant because it suggests that the market has gathered enough momentum to move higher. Adding to the bullish outlook, the Relative Strength Index (RSI) on the weekly chart has formed an impulsive structure near the 40 level. ” He said.

“The RSI, a momentum oscillator, is often used to identify overbought or oversold conditions. An impulsive structure near the 40 level implies that the market is emerging from a period of weakness and gaining strength, making it an attractive buying opportunity. Given these technical signals, the recommendation is to buy within the range of 7800 to 7900. The target for this trade is set at 8800, representing the expected upside potential. To manage risk, a stop-loss is advised at 7375 on a daily close basis.” Patel added.

Saurabh Mukherjea led Marcellus Investment Managers’ Rising Giants PMS portfolio also recently exited the stock stock, the PMS provider revealed on August 20. The company said it expects better returns from other companies that it added to its portfolio than from Tata Elxsi. It added CMS Info Systems, Coforge and Escorts Kubota to its basket.

Price Action: Shares of Tata Investment Corporation were up 8.44% to ₹6,700.

Shares of Tata Elxsi were up 4.97% to ₹8,065.

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