Tata Motors shares jumped 42% in 2023 so far; should you book profit?

Shares of Tata Motors Ltd have rallied 42 per cent on a year-to-date (YTD) basis. The stock on Friday settled 0.46 per cent higher at Rs 562.20, just 2.48 per cent down from its 52-week high of Rs 576.50, touched in the previous session. Around 4.75 lakh shares changed hands today on BSE, which was lower than the two-week average volume of 8.26 lakh shares. Turnover on the counter stood at Rs 26.76 crore, commanding a market capitalisation (m-cap) of Rs 1,86,730.47 crore.

If we were to go by technical analyst views, the stock may face resistance near its one-year high level (around Rs 577), followed by Rs 600 level in the near term, breaching which, it may hit as high as Rs 620. On the flip side, analysts see an immediate support level at Rs 545 levels. If the counter fails to hold this level, it would open a door for Rs 508.

Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, "Though Tata Motors might be looking lucrative due to recent up moves in the counter. One needs to see that it is currently approaching its historical resistance of Rs 600. Having said that, it has already given 50 per cent return in last 5 months. It is way above the 200-DEMA (daily exponential moving average), which comes near Rs 453. So, mean reversion could be possible if it gets rejected from its above-mentioned resistance zone. One can book profit in the zone of Rs 590-600 levels. As of now, no fresh longs are recommended."

Vaishali Parekh, Vice-President - Technical Research at Prabhudas Lilladher, said, "After a decent run, the stock has taken a breather near Rs 573-577 zone and we can expect a short dip with profit booking with the near-term support visible near Rs 545 levels. The overall trend is positive and only a decisive breach below Rs 545 would slightly weaken the bias and can anticipate a further slide. Currently, one can stay invested and expect that a decisive breach above the peak level of Rs 577 may indicate a breakout for the next targets of 610-620 levels."

AR Ramachandran from Tips2trades said, "Tata Motors is overbought and looks bearish on the daily charts with strong resistance at Rs 577. Investors should be booking profits at current levels and wait for a dip near Rs 508 to buy for better returns in the coming weeks."

Ravi Singh, Vice-President and Head of Research at Share India, said, "On technical setup, the stock traded above 50- and 200-DMA (Day moving average), which indicates strong bullishness. It can hit the target of Rs 580 in the near term."

The stock traded higher than the 5-day, 20-, 50-, 100- and 200-day moving averages. The counter's 14-day relative strength index (RSI) came at 72.06. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-earnings (P/E) ratio of 68.13. It has a price-to-book (P/B) value of 8.27.

That said, the scrip has an average target price of Rs 603, Trendlyne data showed, suggesting a potential upside of 7.33 per cent. It has a one-year beta of 1.23, indicating high volatility on the counter.

Meanwhile, Indian equity benchmarks today extended their fall for the second straight session. The domestic indices were dragged by consumer, technology, metal, state-owned lenders, automobile and energy stocks.

Also Read | Brightcom Group shares continue to climb after turning multibagger, up 156% from one-year low; here's why

Also Read | Indian Energy Exchange shares extend losses, crash 10% today. Here's what the company has to say