Buy Tata Motors with target of 405 and above

For more than a month the Tata Motors Limited was trading in a range bound between 360 – 380 levels. The stock has managed to close above the upper channel of the range bound followed by last 4 days of positive close. Currently the stock is trading at 386.10.

The last three days price activity is also supported by volume. During the last three days, the stock has reasonable volumes compare to the range bound duration. The MACD momentum indicator is showing raising trend in the daily chart. Currently the divergence is trading at 2.03. Over the last three days tata motors has added 18,32,000 shares in the Open interest. During which the stock went up from 369.70 to 386.10. The raise in the price and the open interest can be seen as long buildup in the stock.

Tatamotors breaksout of range bound
Tatamotors breaksout of range bound

In the near term the stock will find support around 380 levels which is the upper channel of the range bound. The stock may find resistance around it is 52 weeks high of 405 levels. One can go long by looking at the target of 405. If it manage to close above 405 then it may go even higher levels .

Muthuraj Paulraj

Passionate about investing and trading in Options.