Tata Motors crash – Head & Shoulder pattern with Elliott waves!

Tata Motors crashed in today’s trading session falling by more than 7% post its result announcement. It is thrilling to see prices behaving exactly as per Elliott wave patterns!

 

The sharp selloff in Tata motors stock today can be attributed to the extremely poor result announced that showed decline in profits by nearly 96% year on year basis. Such sharp fall in profits which was unexpected will obviously result into some serious weakness in stock prices. 

But for a trader what matters most is to see if there was a trade setup that could have helped to capitalize this serious capitulation even before the news or event.

Following was the stock tip on Tata motors which we gave to Equity calls clients on 9^th February –      

TATA MOTORS FUT SELL AT CMP 508.60 SL 520 TGT 490

TATA MOTORS FUT SELL CALL GIVEN BOOK PART TP AT 501.40 AND TRAIL STOP TO COST

TATA MOTORS FUT SELL CALL GIVEN TARGET ACHIEVED BOOK PROFIT AND EXIT AT CMP 488

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 The above call was given based on in-depth research using Technical analysis – Elliott wave and channels.

Now look at the below chart of Tata motors shown today morning equity research report – The Financial Waves short term update

Tata Motors 60 mins chart: Anticipated today morning before equity markets opened.

Tata Motors 60 mins chart – Happened today

Elliott Wave analysis:

Below is the research published today morning before equity markets opened that showed detailed pattern analysis and Elliott wave counts on Tata Motors

The daily chart shows (shown in actual research report) that from October 2016 intermediate wave (Y) is ongoing in form of Flat correction pattern. Currently minor wave c of the same is ongoing which has managed to breach the moving average line thereby keeping the daily bias negative. 

As shown in 60 min chart, post breaching the blue channel support and the Head & Shoulder neckline prices are struggling to generate momentum on either side. As per wave perspective minor wave c of flat correction pattern is ongoing but we can see that since last 2 sessions the previous low is intact which is concerning. Now from near term perspective move below 499 will resume the downtrend for the target of 485 or lower. 

In short, for Tata Motors outlook will be negative as far as prices remain below the neckline. On downside move below the previous low should infuse selling pressure and push prices towards 485 levels.

The above research only highlights the fact that using Advanced concepts of Technical analysis – Elliott waves we are exploiting the probability to be in our favor. 

Want to learn these techniques? Attend the most advanced training on Technical analysis – Neo wave, Elliott wave and Time cycles scheduled on 18^th and 19^th March 2017. News or events does not always help in taking a correct trade but it is best to look at the ongoing patterns and have a trading strategy in place even before the news or results are announced. Learn More

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