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Tata Motors Limited Technical Analysis: Buy | Target Rs 200

INVESTMENT ADVICE

 Buy  Tata Motors Limited (NSE: TATAMOTORS)

TATA MOTORS STOCK RECOMMENDATION

CP#83.8
IdeaBUY
Buy Range80 – 85
Target200 – 220
Duration1.5 – 2 years
Potential Returns^150 – 170%
CP#IdeaBuy RangeTargetDurationPotential Returns^
83.8BUY80 – 85200 – 2201.5 – 2 years150 – 170%

# CP – closing price on May 14, 2020.
^ Potential returns are calculated based on the median of buy range.

 Verify Tata Motors Investment Advice

To verify our authenticity and credibility, do check the trading position update and recommendation timestamp. Be assured such records are permanent and irreversible.

TATA MOTORS COMPANY OVERVIEW

Tata Motors Limited (NSE: TATAMOTORS) designs, develops, manufactures and sells a broad range of automotive vehicles such as passenger cars, trucks, buses, defence vehicles, sports utility vehicles and related accessories. The company offers its products under Tata, Daewoo, Fiat, Jaguar and Land Rover brands. Incorporated in 1945, Tata Motors Limited has operations in the United States, UK, rest of Europe, China and Internationally. The company reported a consolidated net profit of Rs 1,954.51 crore for the quarter ended December 31, 2019, compared to Rs 26,823.22 crore loss reported during the corresponding period of 2018-19.

TATA MOTORS STOCK INFORMATION

Stock Data
NSE CodeTATAMOTORS
Sectoral IndexNifty Auto
52W High201.7
52W Low63.5
Face Value2
Relative Performance_Tata Motors vs Nifty Auto Index

TATA MOTORS TECHNICAL ANALYSIS (WEEKLY)

Tata Motors NSE TATAMOTOR Price Chart - Weekly
Tata Motors NSE TATAMOTOR Price Chart - 2001-2020
  • Looking at the Tata Motors historical share price, the stock had seen a spectacular rally from the bottom of around 11.5 (May 2001) and hit a fresh high of about 199.5 (May 2006).
  • Share price of Tata Motors has slipped into sharp decline afterwards, had broken all the support during the 2008 financial crisis and moved near 25.
  • The stock was recovered afterwards sharply and witnessed a strong rally during 2009-2015, rallying from ₹25 to lifetime high of ₹612.4. A whopping 2350% gain in just seven years.
  • Since it’s lifetime high of ₹612.4 registered during February 2015, TATAMOTORS share price has been in a declining trend.
  • After a consistent downtrend in the last five years, the stock price had taken the support on the Ultimate baseline, which corresponds to earlier lows, thereby making it strong support.
  • As seen in the Tata Motors share price history, the primary trend is positive since 2001. There is a steady support baseline which is moving upwards along with price rise.
  • Overall Tata Motors trend and the broader pattern are bullish, and recent closing above the Primary Trend had given us the opportunity to enter the stock (Inset view).
  • Tata Motors share target will be double or more in the next two years.

TATA MOTORS TECHNICAL ANALYSIS (DAILY)

Tata Motors NSE TATAMOTOR Price Chart - Daily RSI
Tata Motors NSE TATAMOTOR Price Chart - Daily RSI
  • Technically Tata Motors stock price had been moving in the higher top and higher bottom formation indicating positive bias.
  • Attached Tata Motors share price chart had shown, the price had taken support several times on the Uptrend line.
  • Momentum indicator like the 14-days RSI is rising and also suggesting buy Tata Motors share.
  • So buy in the range of 80-85 and set TATAMOTORS share price target at 200-220.

TATA MOTORS TECHNICAL ANALYSIS - Boillinger Band

Price Chart - Daily BB
Tata Motors NSE TATAMOTOR Price Chart - Daily BB
  • Added Bollinger Band on NSE Tata Motors price chart. Bollinger band consists of a moving average and two standard deviations.
  • During Uptrend, Tata Motors Limited share price had dropped near or above the moving average (middle) line. This is a pullback low typically occurs during an uptrend.

TATA MOTORS TECHNICAL ANALYSIS - OBV

Chart - Daily OBV
Tata Motors NSE TATAMOTOR Price Chart - Daily OBV
  • As seen in the Tata Motors chart analysis, the OBV is trading above the 15 days MA of it’s on balance volume. Buying pressure is visible as the positive volume exceeds negative volume, and the OBV line rising upwards.
  • The OBV measures the volume change with price to identify the smart money are buying and selling the positions in the stock. This suggests you should invest in Tata Motors at dips and build long positions with institutional investors.

CONCLUSION - TATA MOTORS SHARE PRICE FORECAST

Based on our long term investment recommendation, Tata Motors share price target will be 200-220 in the next 1.5-2 years.

TATA MOTORS INVESTMENT UPDATE - POSITION & ACTIVITIES

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MONEY MANAGEMENT AND TRADING RULES

1)  It’s advisable not to enter/exit beyond the recommended range.
2)  Strictly follow the StopLoss as mentioned. Honour it.
3)  Use trailing StopLoss to retain profits.
4)  Diversify trading capital into our other technical recommendations.
5)  Risk only the money what you can afford to lose. Hedge accordingly.

ANALYST SUMMARY

The research analysis is prepared by Arijit Banerjee, CMT, CFTe. He is a veteran trader and an active investor having in-depth knowledge in financial market research, advanced technical analysis, market cycle, algorithmic trading and portfolio management. Arijit is a Chartered Market Technician (CMT) accredited by CMT Association USA, the leading global authority of Technical Analysis and has been honoured by Certified Financial Technician (CFTe) from the International Federation of Technical Analysts, USA. SEBI, the regulatory body of Indian financial market also recognizes him as a Research Analyst (INH300006582).

Disclosure

The views expressed herein are based solely on information available publicly/internal data/other sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to accuracy. The recommendations provided herein is solely for informational purposes and are not intended to be and must not be taken alone as the basis for an investment/trading decision. Trading and investing are subject to market risk and the securities discussed and opinions expressed herein may not be suitable for all investors. To read the full disclosure, please click here.

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