Tata Motors – How far will it fall? Is it a value buy?

Tata Motors had been a major underperformer within the auto space. With each swing of fall investors have been thinking this is it but only to see it fall further! So, even if you think it is a value buy at every fall you are only losing your capital.

It is therefore best to await and get positive price confirmation before committing your hard earned capital to a stock like this. A similar story was witnessed even in pharma stocks when at each fall everyone simply kept on losing money. However, we published our bullish outlook on Pharma only recently after seeing faster retracement above the last falling segment and when the important resistance levels were taken out. This makes a lot of sense as you are getting a value stock but with a strong technical confirmation.

Similar strategy should be adopted even for Tata Motors, Now look at the below chart which is published in our daily equity research report – The Financial waves short term update

Tata Motors Daily chart:

Tata Motors Hourly chart:

Wave analysis:

Tata Motors a leading global automobile manufacturing company has shown a massive downfall by 33% since the start of the year 2018. From the high made near 450 levels the stock has failed to show any signs of positive retracement and currently the stock is trading near its 52 week low.

As shown on daily chart, prices are moving in downward sloping channel. Prices are moving in the form of Complex correction pattern and the last set of correction in the form of wave z is ongoing. If carefully look at the RSI indicator we can see that it is moving in a range also the overbought zone for RSI has now changed to 60 from where prices recently witnessed a down move.

A shown on hourly chart, prices are forming Bow- Tie Diametric pattern in which contraction is seen in initial legs and currently expansion is ongoing.  As per wave prospective, wave ……….. is completed on upside near …… levels and currently wave ………. is ongoing on downside.

In short, trend for Tata Motor remains negative. Break below …….. levels can take the prices southward towards …….. levels or lower levels. Avoid creating any long positions unless we see close above ………. where wave ……… completed. This stock has drastically failed to live up to investor’s expectations and it is best to avoid catching a low here.

The above clearly shows the strategy you can follow to invest in so called value buying. It is best to let stocks run its course and when it is done we will know by seeing a faster retracement above the last falling segment.

So what are the key levels on stocks like Tata Motors for value buying?

Charting tool: Plot your chart on Tata Motors

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