Tata Motors to shift gears

A break above ₹205 will strengthen the up-move and take the stock up to ₹250

Here are answers to readers’ queries on the performance of their stock holdings.

I have shares of Tata Motors at an average price of ₹347. Should I hold or sell them?

Kishore , Ranjith Anbalagan, Y Suneeta

Tata Motors (₹190): The long as well as intermediate-term trends are down for the stock of Tata Motors. But the near-term trend is up. Last week, the stock of Tata Motors gained 12 per cent, accompanied with above-average volume. Over the past four weeks, there has been an increase in volumes.

After recording a multi-year low at ₹164.5 on October 25, 2018, the stock changed direction, triggered by positive divergence in the daily indicators. Since then, it has been in a near-term uptrend. The stock has a significant long-term support in the ₹140-150 band.

 

 

Any decline below the immediate support level of ₹164 can find support in the long-term base. The relative strength index in the weekly chart is recovering from the oversold territory. Moreover, the daily RSI features in the neutral region with a positive bias and the daily price rate of change indicator hovers in the positive territory, depicting buying interest. Taking a contrarian stance, the short to medium term outlook is bullish for the stock.

Consider averaging the stock in declines while maintaining a long-term stop-loss at ₹140. A decisive break above the immediate resistance at ₹205 will strengthen the up-move and take the stock up to ₹250.

A further rally above ₹250 will pave way for an up-move to ₹275 and ₹300. Only a strong break above ₹300 will alter the intermediate-term downtrend and take the stock higher to ₹320 and then to ₹350 levels over the long run. Investors can consider taking profits if the stock struggles to move beyond ₹300 levels.

Send your queries to techtrail@thehindu.co.in

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