Technical analysis on Tata Motors.

Tata Motors as on 18 Apr’13 – 282.45

Tata Motors as on 18 Apr’13 – 282.45

As It can be seen in attached chart, Tata motors has made a low of 203 in end of July’12, and since from then making higher tops and higher bottom up till Jan’13 where it made a high of 337.40, notably which is higher than life time high of 320.75 made in Apr’12.  From Jan’13 price corrected exactly 61.8% last up leg from low of 203 to high of 337.40.

From last two weeks after making a low of 251.80 (61.8% Fibonacci Retracement) prices are moving higher on gradual note. In the last session we saw spectacular move where prices moved sharply higher.

According to my observation, Tata motors will continue to move higher. Undoubtedly, it has to cross some strong resistances in between, but I believe broader market can retest its highs, in such scenario Tata motors can also move higher.

On the way ahead prices has to face challenge near ~292 where falling trendline can will work as stiff resistance to prices, above which it has a scope to go up till 305 or higher.

Trading Strategy for Tata motors –

Due to last session’s sharp rise, it is possible that prices may consolidate a bit, before moving higher. Traders can accumulate stock near 275-278 level, with a stop loss below 265.  Or alternatively, traders can buy call option of Tata motors for next month’s expiry, as this month is almost about to over. Strike price can be 300 CE option LTP-7.05. Traders can accumulate this option near 6-6.5 and hold; stop loss will be adjusted according to cash levels. (If cash prices moves below 265 level than it is better to exit from call option).

 

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