Tata Motors: Island formation
Updated
Tata Motors
Observations
- Last year on 31-May-2016 the stock opened with a significant gap up & closed at 459 up 38 points from its previous day close of 421
- This year On 8-Aug-2017, the stock opened significantly lower and closed at 380 down 36 points from its previous day close of 416
- the gaps have occurred from similar levels 421 and 416 respectively and of similar magnitudes on a closing basis (38 & 36 points respectively)
- thereby forming an island of trade of more than 1 year
Scenario 1
The stock goes up... sees price rejection and falls down
Scenario 2
Stock gets sold in to and falls deeper
Strategy 1
Buy at current levels for target of 405-415
If the stock sees price rejection around the 416-422 zone then sell for downside target of 344-348 and probably even 322
Strategy 2
The stock goes below 374 and is unable to recover above 384 then sell with minor stop of 384 for target of 344-348
- wait for a bounce back. if we see price rejection again in the zone of 362-380, then sell for deeper targets
Take care & safe trading...!!!
Observations
- Last year on 31-May-2016 the stock opened with a significant gap up & closed at 459 up 38 points from its previous day close of 421
- This year On 8-Aug-2017, the stock opened significantly lower and closed at 380 down 36 points from its previous day close of 416
- the gaps have occurred from similar levels 421 and 416 respectively and of similar magnitudes on a closing basis (38 & 36 points respectively)
- thereby forming an island of trade of more than 1 year
Scenario 1
The stock goes up... sees price rejection and falls down
Scenario 2
Stock gets sold in to and falls deeper
Strategy 1
Buy at current levels for target of 405-415
If the stock sees price rejection around the 416-422 zone then sell for downside target of 344-348 and probably even 322
Strategy 2
The stock goes below 374 and is unable to recover above 384 then sell with minor stop of 384 for target of 344-348
- wait for a bounce back. if we see price rejection again in the zone of 362-380, then sell for deeper targets
Take care & safe trading...!!!
Note
As per Strategy 1Tata Motors has achieved it's upside target
Book profits in Long position and if we see price rejection in this zone we look forward to sell
Take care
Happy & safe trading...!!!
Trade active
Tata Motors makes a high of 413 so far....Trade is active on the short side
Take care & safe trading
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