Shares of Tata Motors jumped over 5 per cent to a new life-time high of Rs 1,035 in intra-day deals on Tuesday after the auto major announced the demerger of its commercial vehicles and passenger vehicles.
With today’s sharp gain, the stock has surged 32 per cent so far this calendar year, and was up a stunning 145 per cent so far for the fiscal year FY24. The buying has been so aggressive at the counter that the stock Tata Motors has ended with gains in 9 out of the 11 months so far.
The board of Tata Motors Ltd (TML) on Monday after market hours approved a proposal to demerge the automobile maker into two separate listed companies. One entity will house the commercial vehicles (CV) business and its related investments, while the other will encompass the passenger vehicles (PV) businesses, including domestic PV, electric vehicle (EV), Jaguar Land Rover (JLR), and their related investments.
That apart, the auto maker alongside Mahindra & Mahindra and Ola Electric are set to receive another round of incentives as they take the lead in getting benefits under the government’s production-linked incentive (PLI) programme.
These three firms were receiving subsidies under the ongoing Faster Adoption & Manufacturing of Electric Vehicles in India (FAME India) scheme, valid till this month.
Against this backdrop, here’s how the stock looks on the chart.
Tata Motors
Current Price: Rs 1,025
Upside Potential: 26.8%
Resistance: Rs 1,070; Rs 1,160
Support: Rs 975
The stock is trading on a buoyant note on multiple time-frames, with key momentum in fairly overbought zone on the medium and long-term charts. However, the Directional Index is still in rising mode both on the weekly and monthly charts, thus suggesting that any dips at the counter could attract aggressive buyers at lower levels.
The yearly Fibonacci chart suggests that Tata Motors can potentially rally to Rs 1,300 on the upside, with interim resistance seen around Rs 1,070 and Rs 1,160.
On the other hand, In case of sustained trade below Rs 975, the yearly close of Rs 950 could act as an immediate support, below which the stock could dip to Rs 830 levels.
First Published: Mar 05 2024 | 10:00 AM IST
