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Technical Observations

* The Nifty Auto index is at the cusp of generating a breakout above the last four year range and forming higher peak and higher trough in all time frame. Tata Motors has been an outperformer within the Auto stocks and we expect it to continue with its outperformance

* The last four weeks’ breather has taken the shape of a bullish Pennant formation. The stock is currently seen registering a breakout above the same signalling continuation of the up move and offers fresh entry opportunity

* We expect the stock to continue with its recent up move and head towards | 570 levels being the 161.8% external retracement of the last four weeks breather (| 530-468)

* The stock has already taken four weeks to retrace just 23.6% of the preceding four weeks rally (293-530), a shallow retracement signals a robust price structure and a higher base formation

* Among the oscillators the weekly MACD remain in strong up trend and is seen diverging from its nine periods average thus validates positive bias.

Buy Tata Motors Ltd @ 515.00-523.00 TGT 570 SL 488

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