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Tata motors chart shows very interesting and crucial juncture. Prices have moved up on slower momentum on different degrees from short to medium term. A very important topping process is forming in this stock.
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“Reliance Industries results were above expectations but the stock made a low of 880 below the price before the result announcement. RBI not only cut repo rate but CRR as well by 25 bps but Nifty reversed on same very day and is trading below the levels before the monetary announcement.”
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Tata Motors Weekly chart:
Tata Motors Daily chart:
Tata Motors 120 mins chart:
We have mentioned in the previous update of 21st January 2013, “Prices are in the matured stage and moving in the form of wave E of 5. Loss of momentum on upside shown by momentum indicator price ROC (shown above in weekly chart) suggest that upside is limited and prices should not move above 345/350 levels”.
We have been very accurate in capturing the top for Tata Motors. Prices have exactly reversed from the upper trendline of the wedge pattern consecutive for third time and moved lower till the support of 285 levels.
Momentum indicator price ROC exhibits strong negative divergence (shown above in weekly chart) and steep fall in the previous week suggested that prices have completed wave E of wedge pattern near 340 levels and started an impulsive move on downside. At present, it seems that wave ii has completed near 61.8% retracement of the prior wave i and started the next leg on downside in the form of wave iii as shown above in 120 mins chart.
In short, 315 will act as a strong resistance. As long as this level is not taken out on upside our bias is negative and once again prices could move lower till the support of 285 levels. Further, move below 280 will take prices even lower till the next support of 260 levels.