Tata Motors Technical Analysis Report (Nov 30th)

On an everyday basis, someone on social media recommending Tata motors and their wording is like this, “Buy this and retire rich” “Buy this mutlibagger” But Why to buy now?? what makes them say that?

Maybe they think that stock already down 70% from High of Rs 600, on that basis they are recommending Buy. But why you are taking Rs 600 are the base price, no one can say Rs 600 was the fair value of Tata motors, After touching Rs 600 many odd things started happening in Tata motors.

Here Odd things mean those losses which a company can save if they plan or if they make some strict conditions, as we all know Tata motors main income is from Jaguar Landrover and for setting transactions they have to keep eye on currency fluctuations and this is the main part, in Q2-2016 they booked heavy loss in currency hedging, these all things was there in financial statements but people were not aware of that.

At Rs 440-430 last year Near June -July, On quora I recommended SELL on tata motors because I got many bearish setups and many patterns in Tata motors which all were indicating a fall in the coming months, and when news is bad and we have a bearish pattern then no one can save a share price. ( That quora account ban in sep 2017).

Now after 15 months of last sell recommendation, I am getting some target of Rs 100-120 levels in Tata motors. See here we have to review it again and again on a quarterly basis, but not a single time I got any buy signal and will keep updating about it until I get some Buy signals.

How to Evaluate a stock chart?

Evaluating stock chart means check long term chart with a different pattern and you will get trend and confirmations from volume then you will get an idea of buy/sell.

Here in this latest review, there are many interesting points to focus on. ( share this information it is very useful for all).

1. Volume part
2. First Support at 130-135
3. Screaming Buy at 80-100.

Volume

Technical Analysis is all about reading charts, reading volume part. One who can read this carefully will always a step ahead from others. Volume part is always confusing new people but if you try to track them with proper time frame then you will get a result.

In the above chart, you can understand that whenever Tata motors hit the lowest part volume peaked out near 550 Million. From this, we will get a simple idea that whenever again if tata motors have to bottom out it has to hit Volume of 550 Million on a monthly basis. ( +-2-5% variance we can adjust). So from the volume part, we have one indication.

Here Bottom out means it has to digest all the bad news in the market, and that bottom mark will be the lowest point for the next 4-5 years, and Tata Motors is the only stock which forms TOP and BOTTOM too early compared to Market top and Bottom.

Conclusion: Wait for these combinations for doing lumpsum Investment, volume has to hit 550 million and price have to be in between 80-135, then it’s a pure Investment buy, Or for SIP you can start at 135 and slowly you can add in parts, this if for Investment purpose only, Not for Short-term trading. 

Sharing this information doesn’t harm you, share with your friends, it will help you all to get more and more knowledge about the market, and it will encourage me to write about this Important factors one have to remember while taking Investment.