Tata Motors shares fall for ninth session, give up Rs 1,000 mark; here's what analysts say

Shares of Tata Motors Ltd are in a free fall for the last nine sessions. The Tata Group stock, which closed at Rs 1119.65 on August 29, 2024 hit an intraday low of Rs 990 in the current session, losing 11.21% during the period. However, the large cap stock has not entered the oversold zone despite the ongoing correction signals its relative strength index (RSI) at 41.4. 

The stock has gained 70.28% from the 52-week low of Rs 608.45 on October 4, 2023. 

In the current session, Tata Motors stock slipped over 4% to Rs 990 level on BSE and gave up the Rs 1,000 level to the ongoing correction. 

The multibagger stock closed 0.30% lower at Rs 1035.45 on Tuesday against the previous close of Rs  1038.60 today. Market cap of the firm slipped to Rs 3.64 lakh crore on Wednesday. On BSE, around 2.42 lakh shares changed hands amounting to a turnover of Rs 24.16 crore in the previous session. 

Shares of Tata Motors hit a record high of Rs 1179.05 on July 30 this year and fell to their 52-week low of Rs 608.45 on October 4, 2023. 

The multibagger auto stock has climbed 59.14% in a year and risen 234% in three years. Tata Motors stock has a one-year beta of 1, indicating very average volatility during the period.

In terms of technicals, the relative strength index (RSI) of Tata Motors stood at 41.4, signaling it's trading neither in the overbought nor in the oversold zone. 

Tata Motors shares are trading lower than the 5 day, 10 day, 20 day, 30 day 50 day and higher than the  100 day, 150 day and 200 day moving averages.

Commenting on the outlook of the stock amid the ongoing correction, Mandar Bhojane, Equity Research Analyst, Choice Broking said, "The stock is retesting its previous breakout level around Rs 1,040, which is acting as a key support level. Despite showing some short-term weakness, as indicated by a minor breakdown, the stock remains in an overall bullish trend. The recent price drop in Tata Motors brought close to its Bollinger Band's lower boundary and the 50-day Exponential Moving Average (EMA), both of which are providing additional support. Importantly, the stock continues to trade above its 50-day and 200-day EMAs, reinforcing the longer-term bullish outlook. Short-term targets are in the range of Rs 1,120–Rs 1,200. Accumulating at these levels may prove beneficial. For both traders and investors, this presents an attractive opportunity, as the stock continues to show resilience within its bullish framework, despite recent dips."

Osho Krishan, Senior Analyst - Technical & Derivatives, Angel One said, "Tata Motors experienced a notable correction, leading to a decline to the 50-day EMA on the daily chart. However, taking into account the broader time frame, the stock has been displaying a pattern of higher highs and higher lows. It is important to monitor the Rs 1000 level as a critical zone for the stock, as breaching this level could potentially disrupt the current market sentiment. Meanwhile, a strong move above the Rs 1080-1100 range would indicate a positive shift in momentum. Hence, staying vigilant about the specified levels and responding appropriately while maintaining proper risk management practices is crucial."

Om Mehra, Technical Analyst SAMCO Securities said, "Tata Motors has extended its downtrend, marking a ninth consecutive session in decline. After rising steadily from Rs 1,008 to Rs 1,142, the stock has entered into a correction phase. On the daily chart, a double bottom pattern is forming, suggesting potential support may emerge soon. The volume has decreased in the week which indicates the lower market participation, while the daily RSI stands at 44, reflecting a neutral to negative bias aligned with recent price action. This weakening momentum points to a cautious outlook. However, the Rs 1,000– Rs 1,020 range could offer a favorable entry point for long positions and would present a better risk-reward scenario. If the stock reverses from these levels, there is a potential upside toward the Rs 1,100–1,130 zone."