Shares of Tata Motors hit a 52-week low on Monday amid weakness in the broader market. Tata Motors stock slipped 1% to Rs 666 against the previous close of Rs 672.90 on BSE. Market cap of the Tata Group firm stood at Rs 2.48 lakh crore. The stock looks weak in terms of technicals as it is trading below the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages. However, Tata Motors stock is trading neither in an oversold nor in overbought zone, indicates its RSI of 37.7. The stock has a one-year beta of 1.2, indicating very high volatility during the period.
The stock hit its 52 week high of Rs 1179.05 on July 30, 2024. The stock has delivered negative returns in the short term. It has lost 38% in six months and fallen 28% in a year.
Jigar S Patel from Anand Rathi said, "Support will be at Rs 660 and resistance at Rs 690. A decisive move above the Rs 690 level may trigger a further upside of Rs 720. The expected trading range will be between Rs 660 and Rs 720 for the short-term."
Shitij Gandhi, Sr. Research Analyst (Technical), SMC Global Securities said, "The stock has been in a sustained downtrend over the past few months, experiencing a significant correction of over 40% from its peak level of Rs 1179. The selling pressure intensified recently as the stock breached a critical support level of Rs 900, further confirming the bearish sentiment. From a technical perspective, the price action has been characterized by the formation of lower bottoms on both daily and weekly charts, indicating a continuation of the downtrend. Currently, the stock is trading well below its 100-day Exponential Moving Average (EMA) on the weekly chart, underscoring the prevailing bearish momentum. However, it is now approaching a key support level near the 200-day EMA, positioned around Rs 645, which could act as a potential floor for the price."
"In the upcoming sessions, the stock is likely to witness heightened volatility as bulls and bulls engage in a tug of war. Fresh buying interest may emerge to defend the 200-day EMA support level, potentially stabilizing the price. Conversely, if the stock fails to hold this level and decisively breaks below the 200-day EMA, it could trigger further downside momentum, potentially driving the price toward the next major support level around Rs 590. Given the current market dynamics and the stock's technical setup, we recommend traders exercise caution at this stage. Adopting a "wait and watch" strategy would be prudent until a clearer trend emerges, either through a sustained rebound above key support levels or a confirmed breakdown leading to further downside," said Gandhi
Ameya Ranadive, Chartered Market Technician, CFTe, Sr Technical Analyst, StoxBox advises investors to wait and watch before making any move on the counter.
"Tata Motors has witnessed a significant correction from its 52-week high, currently trading around ?674.10. The stock remains in a downtrend, as indicated by its position below key exponential moving averages (EMA 20/50/100/200). The RSI stands at 38.13, reflecting weak momentum, while MACD remains in negative territory at -17.80, signaling bearish sentiment. The ADX at 27.92 suggests a moderately strong trend, with the DI- above DI+, reinforcing selling pressure. Despite recent attempts to find support near ?660-670, the stock lacks bullish confirmation. The presence of a sell signal on the 10 EMA CLoud and resistance around Rs 703-718 further indicates caution. Given the current setup, Tata Motors is in a 'no-trade zone,' where neither strong buy nor sell signals are evident. Traders should wait for a decisive breakout above resistance or further confirmation of support before taking new positions. A 'wait-and-watch' approach is advised for now," said Ranadive.
Mandar Bhojane, Equity Research Analyst, Choice Broking said, "Tata Motors is currently trading at Rs 671, maintaining a clear downtrend as it continues to form lower highs and lower lows. The stock has experienced a steady decline from its recent peak near Rs 1,200, with selling pressure keeping the bearish momentum intact. It remains below the 20-day, 50-day, 100-day, and 200-day EMAs, which act as dynamic resistance levels, further reinforcing the weakness. Immediate resistance is placed at Rs 695, followed by a stronger hurdle near Rs 725, aligning with the 50-day EMA. A breakout above these levels could signal a short-term relief rally, but until then, the overall outlook remains bearish. On the downside, Rs 650 serves as a key support level, and a breakdown below this mark could intensify selling pressure, dragging the stock toward the next major support at Rs 620. The Relative Strength Index (RSI) is currently at 37.37, reflecting weak momentum and continued selling pressure. Despite occasional recovery attempts, the stock has struggled to gain traction, with no clear reversal signals at this stage. As long as Tata Motors remains below its key resistance levels and moving averages, the trend is expected to remain bearish. A sustained move above Rs 725 may indicate a potential trend reversal, while a breakdown below Rs 650 could open further downside potential toward Rs 620 or lower. Traders should closely monitor price action for any signs of a shift in trend before considering long positions."
AR Ramachandran, SEBI registered Independent analyst says, "Tata Motors is sideways to bearish on the Daily charts with strong support at Rs 666. A Daily close above the resistance of Rs 694 could lead to a target of Rs 751 in the near term."
Incred Equities has assigned a reduce rating with a price target of Rs 661 to the Tata Motors stock.
Tata Motors’ consolidated EBITDA in 3QFY25 fell 14% yoy but was up 6% qoq at Rs 155 bn, missing our estimate by 11% and Bloomberg consensus estimate by 3%, said Incred.
Incred Equities is bearish on the prospects of the firm's overseas arm JLR.
"With tariff challenges in global trade and volatile currency movement, JLR will be vulnerable, despite its improved product mix and new vehicle launch plans. Increased competition in India’s electric car and small truck segments are a cause of concern. We maintain our REDUCE rating on Tata Motors. Key upside risks: Success of new products and demand stimulus benefits," said Incred Equities.
On the other hand, global brokerage CLSA has given a rating upgrade to the auto stock as it believes an adverse near-term outlook has given scope to enter the counter at favourable valuations. It has assigned an outperform rating to Tata Motors stock with a price target of Rs 930.
Emkay Global has given a target price of Rs 950 on the stock. Motilal Oswal has a price target of Rs 755 on the auto stock.
"We expect margin pressure to persist at JLR over FY24-27E, given: weak demand in key regions, rising cost pressure as it invests in demand generation, and EV ramp-up, which is likely to be margin-dilutive. Even in India, both CV and PV businesses are seeing a moderation in demand. For lack of any triggers, we reiterate our Neutral rating with a Dec’26E SoTP-based target of Rs 755," MOFSL said post Tata Motors' Q3 results.