Tata Motors, Tata Consumer: Tata Group stks may lead the next market rally

So far in the month of February, Tata Consumer Products, Tata Steel, and Tata Motor have outperformed the benchmark Nifty50 index by rallying between 12 per cent and 22 per cent

Tata Consumer Products, the FMCG unit of Tata Group, is set to enter the benchmark Nifty50 index from March 31, 2021. With the arm's inclusion, weightage of Tata Group stocks in Nifty pack will increase to 8.75 per cent from 8.15 per cent presently. At the moment, Tata Consultancy Services, Tata Steel, Tata Motors and Titan are already part of the benchmark index.

Tata Consumer, formerly known as Tata Global Beverages, will join FMCG peers such as Hindustan Unilever, Nestle India and Britannia in the widely-tracked Nifty 50 index. The move is expected to result in passive inflows of $89 million (Rs 650 crore) in Tata Consumer.

Analysts at Motilal Oswal Financial Services believe Tata Consumer Products' two strong legs in the India business -- Tata Tea and Tata Salt – by which it is targeting lower double-digit growth -- give a leg-up to the firm. Besides, they also help to cross-sell between Tata Chemicals and TCP’s distribution channels and expansion into new geographies. The brokerage has a 'buy' rating on the stock with a target price of Rs 661 per share.

So far in the month of February, three of the above-mentioned five Tata Group stocks -- Tata Consumer Products, Tata Steel, and Tata Motor -- have outperformed the benchmark Nifty50 index by rallying between 12 per cent and 22 per cent, ACE Equity data show. On the other hand, while Titan is up only 2 per cent till Wednesday, TCS has declined 5 per cent on the NSE. In comparison, the Nifty50 index has gained 9 per cent during the period.

Against this backdrop, how does the Group look on charts now? Here's a technical viewpoint:
 

Tata Chemicals Ltd (TATACHEM): This stock has touched a new all-time high, on February 25, on the back of heavy volumes. The Relative Strength Index (RSI) is witnessing buying momentum even in the overbought territory, signifying that the stock is firm enough to absorb any downward pressure. Besides, any move above Rs 600 levels witnessed tremendous buying and accumulation. Given this, the stock looks poised to hit Rs 1,000-mark over the medium term and one can expect accumulation on any mild correction. The immediate short-term support comes at Rs 650 levels. CLICK HERE FOR THE CHART
 
Tata Steel Ltd (TATASTEEL): As the stock manages to sustain its rally above Rs 735-mark, any fresh breakout may push the price towards Rs 780 and Rs 800 levels. The overall trend is bullish with a support placed at Rs 700 levels. One can also see a trendline breakout around the same level, as per the daily chart. Moreover, the RSI has managed to break above the sideways movement, suggesting the underlying positive sentiment. CLICK HERE FOR THE CHART
 
Tata Consultancy Services (TCS): As per the daily chart, the IT scrip lost its momentum below the Rs 3,150-mark. The stock now needs to hold the support of Rs 2,850 to avoid further weakness and build-up of bearish sentiment. The Moving Average Convergence Divergence (MACD) has breached the zero line downward, reflecting a selling pressure on upward reversal. CLICK HERE FOR THE CHART

Tata Motors Ltd (TATAMOTORS): After a strong rally so far in the month of February, the stock is facing resistance at Rs 340-mark, as per the daily chart. Once this resistance is conquered, the upside may see the rally getting extended towards Rs 400 levels. That said, the stock needs to defend Rs 280 levels to maintain the positive sentiment. Overall, the stock is witnessing a consolidation at the current juncture. CLICK HERE FOR THE CHART
               
Tata Consumer Products Ltd (TATACONSUM): This stock needs to conquer the resistance of Rs 640, supported by strong volumes, to see further strength. For now, the support range of Rs 610 to Rs 600 seems to support the upside bias. That said, MACD is trading with a positive crossover, suggesting an upward momentum, as per the daily chart. CLICK HERE FOR THE CHART
 
Tata Elxsi Ltd (TATAELXSI): This stock is failing to uphold the upside bias above Rs 2,800 levels. One can expect a weakness to aggravate if it falls below the immediate support of Rs 2,600 levels. Both the technical indicators, RSI and MACD, are trading with a negative crossover suggesting weakness. Above Rs 2,800 levels, resistance is seen at Rs 2,930 mark, as per the daily chart. CLICK HERE FOR THE CHART