Tata Motors: Island formation

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...!!!

Comment:

As per Strategy 1
Tata 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