Tata Motors shares breach key support level; good time to buy?

Shares of Tata Motors breached the cardinal enactment portion during the correction successful the erstwhile session. The stock, 1 of the wide tracked scrips successful the car sector, deed an intraday debased of Rs 375.50 and closed astatine Rs 384.85 connected BSE connected December 26. Tata Motors breached the enactment portion of Rs 390-400 during the day. On December 23 too, the banal ended astatine Rs 378.30. Tata Motors banal deed an intraday debased of Rs 376.70 connected the time erstwhile Sensex and Nifty crashed amid anemic planetary cues. With the dip, the Tata Motors banal came adjacent to the 52-week debased of Rs 366.05 deed connected May 12, 2022.  

However, shares of Tata Motors were trading 2.46% higher astatine Rs 394.40 today. They deed an intraday precocious of Rs 397.2, rising 3.21% connected BSE. Tata Motors shares are trading little than the 5-day, 20-day, 50-day, 100-day and 200-day moving averages. Market headdress of the steadfast stood astatine Rs 1.31 lakh crore.

The banal has mislaid 25.24% from its 52-week precocious of Rs 528.35 deed connected January 18, 2022.

The correction successful the banal tin beryllium attributed to the economical slowdown, planetary shortage of semiconductors, anemic planetary markets and Russia-Ukraine war.

The banal breaching its enactment level mightiness beryllium a awesome that the correction signifier is over. However, analysts suggest that it mightiness not beryllium a bully clip to bargain aft the caller recovery. They counsel investors to hold till the banal goes supra Rs 400 level. Here's a look astatine what brokerages said astir the prospects of the stock.

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Osho Krishan, Sr. Analyst - Technical & Derivative Research, Angel One said, "Tata Motors is hovering adjacent the clump of its large exponential moving mean connected the regular illustration and is hustling to surpass the 200 SMA for rather immoderate time, indicating tentativeness successful the banal price. On the method parameters, the banal has beardown enactment placed adjacent Rs 390 unusual levels, that historically has proved its mettle. While connected the flip side, the contiguous absorption is placed around  Rs 440, and a decisive closure supra the aforesaid could lone dictate the adjacent acceptable of rally successful the counter."

Gaurav Ratnaparkhi, Head of Technical Research astatine Sharekhan by BNP Paribas said," Tata Motors successful its past week's diminution breached the enactment portion of Rs 390-Rs 400. With the bounce this week, it moved up to trial that zone, which is expected to enactment arsenic a absorption portion arsenic per the rule of relation reversal. Unless the banal crosses the Rs 400 people connected a closing basis, it is apt to spot downside unit that tin propulsion the banal down to 375-370. If we look astatine the larger picture, past the banal has been witnessing a multi period consolidation. A dip towards the little extremity of the consolidation that is adjacent Rs 370-366 volition beryllium buying accidental arsenic acold arsenic outlook for 2023 is concerned. The banal is expected to determination up towards the precocious extremity of the consolidation with imaginable targets astatine Rs 440 and Rs 490."

Abhijeet from Tips2trade said, "Tata Motors needs to adjacent supra Rs 445 connected the play charts for a sustained uptrend till Rs 495-520 from a longer-term perspective. Rs 366-376 is simply a precise beardown enactment zone. A play adjacent beneath this level could pb to a crisp autumn till Rs 330-305 successful 2023. Investors who are holding Tata Motors should support a strict halt nonaccomplishment of Rs 365."

Ajit Mishra, VP & elder Technical Analyst, Religare Broking said, "Tata Motors has been trading successful a corrective signifier for the past 1 year, aft the phenomenal surge portion hovering wrong Rs 370-500 levels. It has precocious tested the little set of the scope and seeing a rebound now. We frankincense judge the downside would stay capped until it breaches Rs 370 levels decisively. The determination was astir vertical from March 2020 debased i.e. Rs 63.5 levels and it made a precocious astatine 536.70 levels successful December 2021. To digest specified gains, it is accustomed for stocks to witnesser consolidation, which could past for months.

After a year-long corrective phase, we expect the banal to resume an uptrend successful the coming year. We consciousness further dip towards the Rs 340-370 portion tin beryllium considered arsenic an accidental to accumulate fresh. On the higher side, Rs 420-450 portion would archetypal enactment arsenic a hurdle. To resume the uptrend again, it should decisively transverse the declining inclination line, which presently lies astir  Rs 480 levels."

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Apurva Sheth, Head of Market Perspective & Research, Samco Securities said, "As China's Covid concerns loom large, Tata Motors' problems are getting bigger. China is 1 of the cardinal markets for the company's subsidiary Jaguar Land Rover (accounts for 31% of full gross successful Q2FY23) and the expanding Covid cases are adding woes to the automaker successful presumption of income measurement and manufacturing. These uncertainties person dragged the banal down. The New Year 2023 volition proceed bringing challenges for Tata Motors globally until the acheronian clouds lift. Recovery successful important markets similar UK and Europe is vital. However, Tata Motors is seen making a singular turnaround successful the home marketplace by leveraging and enhancing its existing portfolio on with caller merchandise launches. On the method front, the banal breached its enactment of Rs 390 unusual levels, which held the banal from sliding for the past 6 months. This important level has historically been the automaker's large request zone. The bulls person again retested the inclination enactment resistance, however, immoderate decisive closure supra Rs 420 volition beryllium a bully catalyst for a sharp-up determination to Rs 450. Nonetheless, if the banal breaches Rs 375, 1 tin expect it to scope Rs 350 levels."

Japanese brokerage Nomura assigned a bargain telephone connected Tata Motors with a people of Rs 520 successful the opening of this month. Tiago EV received 10k 1st time bookings which is large affirmative for the stock. The brokerage expects Tiago EV to merchantability 3000 to 5,000 units per period and its wide Tata Motors EV income to interaction 60,000/96,000  in FY23/24F.

"Every 1 per cent marketplace stock summation successful idiosyncratic vehicles has imaginable to adhd Rs 5000 crore to the company's marketplace cap," added Nomura.