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I am holding shares of Tata Motors bought at ₹258 and intend to hold it for three years or more with the expectation that it will be a multi-bagger. What is the long-term outlook?
Yogesh Wagh
Tata Motors (₹285.75) : The stock of Tata Motors has been in an intermediate to long-term uptrend since it took support at around ₹63.5 in March 2020. The uptrend accelerated in January and February this year in which the stock gained 42 per cent and 23 per cent respectively in each of these months.
The stock met with a key resistance at ₹357 in early March and thereafter it started to consolidate sideways in the wide band between ₹275 and ₹360. From the March 2020 low, the stock is already a multi-bagger. In early July, the stock tested the upper boundary at ₹360 and failed to break above this level. Since then, the stock has been in a medium-term downtrend. Short-term trend is also down for the stock. It trades well below the 21- and 50-day moving averages. The stock tests the key support at ₹275 now. A strong plunge below this base will strengthen the downtrend and pull the stock down to ₹240 initially and then to ₹200 levels over the medium term. Next significant supports are placed at ₹180 and ₹160 levels.
On the upside, a clear up-move above ₹300 will alter the short-term downtrend and take the stock higher to ₹325. To alter the medium-term downtrend, the stock needs to break above ₹325. Such a breakthrough will pave the way to test the upper boundary at ₹360 over the medium term. A conclusive break-out of ₹360 will accelerate the stock higher to ₹400. A break above the long-term barrier at ₹430 will strengthen the uptrend and take the stock northwards to ₹500 and then to ₹600 over the long run.
Can I accumulate the stock of AU Small Finance Bank at current levels?
Prakash Chandra
AU Small Finance Bank (₹1,292.8) : After a sharp fall from the key resistance level of ₹1,200 in March 2020, the stock found support at ₹366 in May 2020. Subsequently, it changed direction and has been in a long-term uptrend. In early August this year the stock had surpassed the key long-term barrier at ₹1,200 and met with a resistance at around ₹1,400 levels two weeks back. The stock has been in a corrective decline over the past two weeks. A fall below the crucial base level of ₹1,200 can pull the stock down to ₹1,165 levels. Next supports are placed at ₹1,100 and ₹1,000.
You can wait and make use of the corrective decline to accumulate the stock with a medium-term stop-loss at ₹985 levels. A rally above the immediate resistance level of ₹1,360 can take the stock to ₹1,400.
A break above ₹1,400 can take it northwards to ₹1,500 and ₹1,600 levels over the medium term.
Send your queries to techtrail@thehindu.co.in
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