Top buzzing stock: Tata Motors Ltd

Top buzzing stock: Tata Motors Ltd

by 5paisa Research Team Last Updated: 2022-05-13T11:40:32+05:30

The stock of TATAMOTORS is extremely bullish today and has soared over 9% on Friday’s trading session.

 With this movement, Tata Motors is one of the top gainers among the Nifty stocks. On the technical chart, it has formed a strong bullish candle despite a huge gap-up opening. It has also recorded above-average volumes which indicates strong trading activity. Earlier, it had witnessed a healthy correction of about 16% since its prior swing high, but has jumped sharply from its low of Rs 366.20 in previous trading session. Such price action has can be attributed to huge short covering post results.

Tata Motors had reported its quarterly results on Thursday. The loss narrowed to Rs 1032 crore, and sales had also slumped 11.5% YoY. Despite the poor results, it has been better than what was expected by the analysts. This has led to a good short covering rally in the stock.

With this, the technical parameters have seen a sharp improvement in the stock’s strength. The 14-period daily RSI has jumped to 44.45 and points in the northward direction. The MACD line and signal line are converging, and possibly indicate a bullish crossover in coming days. The On Balance Volume, too, has seen an improvement from the volume’s perspective.

This price action can be an early sign of reversal. The stock still trades below all the key short term and long term moving averages. On YTD basis, the stock has performed poorly and has generated negative 15% returns. A rise above the 20-DMA level of Rs 420 shall indicate a positive move to the level of Rs 450 and beyond. Otherwise, it shall be called a technical pullback or a dead cat bounce. Traders can include this stock in their watchlist and watch for the above level to anticipate the trend.


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