Today #TataMotors has hit lower circuit because of chip shortage news. Many would be confused what should be done whether to sell holdings or use this opportunity to buy. We will discuss this plus chart analysis in this thread.
Do 𝐥𝐢𝐤𝐞 and 𝐫𝐞𝐭𝐰𝐞𝐞𝐭 for wider reach.
Let's start with chip shortage news. This is not new news for Equity Market globally. I have been reading this news for few months now.
Finshot News on Chip Shortage (Feb21): finshots.in/archive/the-gr…
CNBC news (May21):
cnbc.com/2021/05/14/how…
Tata Motors was down by 6% that day
Sometimes negative news is genuinely negative and price crashes and gives follow through downside move as seen in case of Yes Bank, DHFL, Jet Airways case.
Sometimes negative news is brought in market just to hammer the stock price so that big/smart players can accumulate the stock at lowers price and then push price upwards.
This was seen in case of Infosys.
𝐍𝐨𝐰 𝐰𝐡𝐞𝐭𝐡𝐞𝐫 𝐨𝐧𝐞 𝐬𝐡𝐨𝐮𝐥𝐝 𝐛𝐮𝐲 𝐨𝐫 𝐞𝐱𝐢𝐭?
Simple answer for this: if Tata Motors gives closing below today's low (311.5) then it can go down. But if it gives close above today high (358.2) then possibly this was an intentional short attack or fake down move
If we check charts of Tata Motors:
After breakout, price has closed below the support line now. If in coming days, price closes above trendline (currently level is 322) then possible retracement or correction in stock will be over.
Fibonacci Retracement:
Price took support exactly at 61.8% levels in Fibonacci Retracement. Ideally 61.8% is the level where price can correct during uptrend. Same happened with Tata Motors crash today.
This is not a big news and it will create short-term impact on their operators probably for a few months.
Disclaimer: This thread is not a buy or sell recommendation so take your call before taking any action in Tata Motors stock.
DHFL chart.
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