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Short-term traders can look to buy the stock for a target of Rs 975 in the next 3-4 weeks, suggest experts.
The auto stock rose from Rs 441 as on 16 February 2023 to Rs 938 as on 16th February 2024 which translates into an upside of 112% in 1 year.
The momentum pushed the stock higher by over 14% in a month and more than 30% in the last 3 months. It has rallied over 50% in the last 6 months.
Tracking the momentum, the stock hit a record high of Rs 949 on 5th February 2024, but it failed to hold the momentum and witnessed profit-taking.
The auto stock has been making higher highs and higher lows for the last 4 months. The stock has been in an uptrend after it bounced back from multi-year resistance above 600 levels.
In terms of price action, the stock is trading well above most of the crucial short- and long-term moving averages such as 5,10,30,50,100 and 200-DMA on the daily charts which is a positive sign for the bulls.
The daily Relative Strength Index (RSI) is at 74.3. RSI above 70 is considered overbought. This implies that stock may show pullback.
“Tata Motors is in overall uptrend and trading near lifetime high territory with strong buying visible across Auto space. Technically, the stock is forming higher lows on a monthly scale from the past seven months and the base of the stock is shifting higher,” Arpit Beriwal, Analyst, Equity Derivatives & Technicals, MOFSL, said.
On the daily scale, the stock negated the formation of lower highs after five sessions and formed a strong bullish candle. It also filled its gap area near 900 zones and closed on a strong note despite market volatility.
“The stock is holding to its 20-Days EMA and the momentum indicator Relative Strength Index (RSI) is also turning upward which suggests momentum to continue in coming sessions,” highlighted Beriwal.
“Thus, looking at the overall chart structure, we are recommending to buy the stock with a stop loss below 890 levels on a closing basis for a target towards 975 zones,” he recommends.
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
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