We recommend a buy in the stock of Tata Motors DVR from a short-term perspective. It is seen from the charts of the stock that after registering an all-time high at Rs 189 in late April 2012, the stock encountered resistance (November 2010 peak) and started to trend downwards. Following a medium-term downtrend, the stock found support at Rs 117 in late July. The stock has key significant support in the band between Rs 117 and Rs 122, which also coincides with 61.8 per cent Fibonacci retracement level of its prior up move. Subsequently, the stock changed its direction triggered by positive divergence in daily moving average convergence divergence indicator. Since then, the stock has been on a short-term uptrend.

On Tuesday, it jumped six per cent with above average volume, breaching its immediate resistance at Rs 130. Moreover, this up move has breached its 21- and 50-day moving averages. The daily relative strength index is on the brink of entering bullish zone and weekly RSI is moving higher in the neutral region. The daily price rate of change indicator is hovering in the positive terrain implying buying interest.

We are bullish on the stock from a short-term perspective. We expect Tata Motors DVR to prolong its up move and reach our price target of Rs 140 or Rs 144 in the approaching trading sessions. Traders with short-term perspective can consider buying it with stop-loss at Rs 131.5.