Bonanza Portfolio highlights trading strategy in Big Bulls Rakesh Jhunjhunwala recent pick during Covid Lockdown

Rakesh Jhunjhunwala bought 4 cr shares or 1.3% stake in Tata Motors. This is another Tata Group stock that the Big Bull Rakesh Jhunjhunwala added in his portfolio after Titan and Rallis India. Vishal Wagh, Research Head at Bonanza Portfolio highlights technical analysis for traders and investors on SBI. Detail analysis will help them to understand the trading levels and stop losses on Tata Motors. Tata Motors share price today is Rs 352, up Rs 6 or 1.9%.

Tata Motors domestic sales number has shown a growth of 53% mom. Tata Motors has managed to multiply itself more than five times since the panic bottom of March 2020. The same nature of the automaker has observed in the year 2008 bottom also. Till 2010 it has given ten-bagger returns to the investors. The 'V shape' recovery is a prominent pattern both times.

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The news of increasing exposure to the electronic vehicle is attracting investors recently. Currently weekly and monthly charts are showing the higher high higher low formation, which is also an indication of the strength in the stock. RSI on a monthly and weekly basis is already in the overbought zone and it may remain there till the time strength continues in the counter.

On the other hand, the daily chart is showing some consolidation in Tata Motors and the supply zone is at Rs 335 – Rs 340 levels. The support is near Rs 314 levels at 20 EMA and the 8-day rolling pivot is at Rs 321. The 300 level has worked as resistance in Jan 2020 and the year 2017 too. So, VIshal is observing a line of polarity near Rs 300 zones. Till the time stock is sustaining above 300 the strength may continue and demand may push it well above Rs 340 levels. The timewise correction may continue till that time.  Above Rs 340 Tata Motors is ready for Rs 394 – Rs 442 levels.

In the running week, the Tata motors central pivot has narrowed which is an indication of a probable stronger move in the next four days. The weekly Central pivot levels are between Rs 319.30 - Rs 317. So it will act as strong support and breaching of the same may lead to a retest of Rs 300 levels and below Rs 300 it may go to Rs 284 levels