Tata Motors, a prominent large-cap stock in the Tata Group, is trading at an 11-month low, with its share price dipping below the ₹800 mark for the fifth consecutive session. On Tuesday, the stock was trading in the green, rising over 3% to ₹791.80, but this follows a period of significant weakness. The oversold status is evident on the charts, with its Relative Strength Index (RSI) standing at a low 22.14, indicating a bearish trend.
Performance Highlights
- Recent Trends:
- Tata Motors shares are trading below all key moving averages: 5-day, 10-day, 20-day, 30-day, 50-day, 100-day, 150-day, and 200-day.
- The stock is down 33% from its 52-week high of ₹1,179.05 (July 30) and hovering near its 52-week low of ₹670.60 (November 20 last year).
- Short-Term Declines:
- The stock has fallen 28% in the past three months, signaling short-term weakness.
- Despite these declines, the stock has risen 15.49% in the last year and 369% over the last five years, demonstrating long-term growth potential.
- Market Activity:
- On Tuesday, Tata Motors saw a turnover of ₹21.34 crore on the BSE, with 2.22 lakh shares changing hands.
- The stock has a one-year beta of 1.1, reflecting high volatility.
Technical Indicators and Expert Views
- RSI and Moving Averages: With an RSI of 22.14, Tata Motors is firmly in the oversold category, signaling potential opportunities for traders awaiting a bounce. However, its trading below all key moving averages indicates a weak trend in the short and long term.
- Technical Analysis:
- Jigar S Patel, Technical Research Analyst at Anand Rathi, cautions against aggressive trades in the near term. He notes:
- A bearish divergence on the monthly chart suggests further downside potential.
- Violation of a 4-year bull trendline signals potential weakness.
- Support is anticipated around ₹700, with resistance near ₹850.
- Patel advises booking profits on any upward bounce, as a correction is expected over the next 1-2 months.
- Jigar S Patel, Technical Research Analyst at Anand Rathi, cautions against aggressive trades in the near term. He notes:
- Brokerage Outlook:
- Kotak Institutional Equities values Tata Motors at ₹1,050 despite revising its FY2025-27 EPS estimates downward, citing lower volume and margin forecasts across all business segments.
What Lies Ahead for Tata Motors?
While Tata Motors’ current share price may look weak in the short term, its long-term performance suggests resilience. The bearish technical indicators and oversold status point to potential correction or consolidation in the coming months.
For long-term investors, the stock’s robust historical returns and a market cap of ₹2.90 lakh crore reinforce its position as a cornerstone of the Indian automotive sector. Short-term traders, however, should proceed with caution, awaiting clearer signals from technical indicators and market trends.
Conclusion
Tata Motors is navigating turbulent times with its share price under pressure, but the long-term growth story remains intact. Investors should keep an eye on key support levels and monitor market conditions before making investment decisions. As brokerages like Kotak remain optimistic about the stock’s potential to recover, Tata Motors’ trajectory will depend on market dynamics, macroeconomic factors, and company performance in the coming quarters.
Stay updated on Tata Motors’ share price and performance trends to make informed investment choices.
