Tata Motor : Is it a sign of reversal ?

2019年10月6日

Tata motor has already achieved target of double top (55% below 265 level). Now we are seeing bullish divergence on weekly RSI which is diverging from price. Counter had respected falling trendline (green) at 140 level on logarithmic scale chart . Arithmetic had given upside breakout and now prices are taking support on the same trendline when counter bounced with good volume on daily chart and made bullish engulfing pattern. For the time being, counter is having resistance around 130-131 range ( both black and green trendline resistance). Counter has been seeing respecting both 65 week EMA and 52 week SMA on multiple occasions but those levels are near 190-200 at this moment.

At the moment, we haven't got reversal signal from price pattern which we'll get on weekly close above 130 and second on weekly close above 140 (higher top higher bottom formation). Daily candlestick is showing short term reversal because of bullish engulfing supported by good volume. Weekly volumes on green candle have been on higher side. Consolidation phase can be there from 106-150 (optimistic scenario 171) zone. Lower supports are at 106 and 95. RSI has broken out from falling trendline but unfortunately we don't have anything on price to form a good long term down trendline.

Long term investors should wait for weekly close above 130 to enter into the counter which will enhance the strength of positive divergence signal on weekly RSI