The stock with a market capitalization of nearly Rs 1.5 lakh crore hit a 52-week high of Rs 536 on November 17, 2021, but it failed to hold on to the momentum. It found support near Rs 360-370 levels back in March and May 2022 from where it bounced back.
However, the momentum fizzled out as it moved closer towards Rs 500 levels in August 2022. The stock is consolidating above Rs 440 levels since then which suggests string base formation for the stock.
Earlier this week, the stock recorded a Golden Cross formation on the daily charts which is a mark of strength for the bulls.
Golden Cross is formed when a short-term moving average (50-DMA) crosses above the long-term moving average (200-DMA). It is a bullish indicator that confirms strength in the long-term trend.
The stock has a strong base near Rs 440; hence, any dips towards this level can be used as a buying opportunity for a short-term pullback.
The Relative Strength Index (RSI) is at 49.7. RSI below 30 is considered oversold and above 70 is considered overbought, data from Trendlyne showed.
“After the short correction Tata Motors stock has bottomed out near 440 levels and has witnessed a decent pullback to improve the bias,” Vaishali Parekh, Vice President – Technical Research, Prabhudas Lilladher Pvt. Ltd, said.
“Currently moving past the confluences of significant moving average like the 200 DMA and 50 EMA at 452 zone indicating a “Golden Cross” to strengthen the trend,” she said.
“With the RSI also showing a trend reversal to signal a buy has made the chart look attractive with ample upside potential move anticipated in the coming days. We suggest traders to buy and accumulate this stock for an upside target of Rs 510 keeping the stop loss at Rs 435,” recommends Parekh.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)