Tata Steel, Tata Motors: No stopping the rally in Tata Group stocks for now

Till the Tata Steel stock defends the closing basis support of Rs 1,050-mark, the upside bias may see a rally toward uncharted territory of Rs 1,200 to Rs 1,270 levels

Tata Group stocks have ruled at the bourses over the past one month, outperforming the benchmark Nifty50 index by a wide margin. Tata Steel BSL, for instance, has climbed 57 per cent over the past 30 days while Tata Metaliks, Tata Steel Long Products, Tata Elxsi, Tata Steel, Tinplate Company, Tata Coffee, and Rallis India have gained between 12 per cent and 37 per cent. In comparison, the frontline 50-share index is up 0.3 per cent during the period, ACE Equity data show.

That said, some of its Group gems such as Tata Chemicals, Titan Company, Tata Consultancy Services, and tata Motors have succumbed to profit booking. Shares of these companies are down in the range of 2 per cent to 16 per cent.

Among these, Tata Steel has seen the biggest turnaround in its fortunes owing to a global upcycle in steel prices and metal demand in the period after the pandemic set in (see adjoining charts). Tata Steel’s market capitalisation more than quadrupled since March 2020 from around Rs 30,400 crore to Rs 1.27 trillion now. READ ABOUT IT HERE

Similarly, Tata Motors’ market capitalisation has gone up four times in the past 12 months as the company has reported a big jump in its passenger vehicle sales in the domestic market and at its Jaguar Land Rover division globally. This has raised expectations of a sharp turnaround in its earnings in FY22, leading a rally in its share price.

On Friday, Group shares were trading largely positive with Tata Steel BSL, Tata Steel, Tata Motors, Tata Chemicals, TCS, and Tinplate gained up to 7 per cent while those of Tata Consumer Products declined 6 per cent on weak operational performance in Q4FY21. READ HERE

Against this backdrop, here is how you should trade in these stocks:

Tata Steel Ltd (TATASTEEL)

Likely target: Rs 1,200 -  Rs 1,270

Upside potential: 5.36% - 11.50%

The stock is witnessing a strong buying momentum even in the overbought category of the Relative Strength Index (RSI). The strength is growing gradually, augmented further by heavy volumes. Till the stock defends the closing basis support of Rs 1,050-mark, the upside bias may see a rally toward uncharted territory of Rs 1,200 to Rs 1,270 levels, daily chart shows. CLICK HERE FOR THE CHART
 
Tata Chemicals Ltd (TATACHEM)

Likely target: Rs 631 (breached 50-DMA)

Downside potential: 8%

After breaching 50-days moving average (DMA) on the downside, the stock is witnessing heavy selling pressure and is now drifting towards 100-DMA, placed at Rs 631 levels. The overall trend is losing the positive sentiment as the Moving Average Convergence Divergence (MACD) has breached the zero line downward. The immediate resistance comes at Rs 747 levels, which is its 50-DMA. CLICK HERE FOR THE CHART
 
Tata Motors Ltd (TATAMOTORS)

Likely target: Rs 340 (after a breakout above Rs 309 )

Upside potential: 10%

The stock of Tata Motors has been attempting to conquer the 50-DMA -- placed at Rs 309 levels -- since the past several sessions. That said, until the support of 100-DMA (at Rs 277.60-mark) is not breached on the downside, the upside bias may see a breakout above 50-DMA. The RSI is trading with a positive crossover and a move above 57 value may see build-up of a firm strength. The breakout rally may see the stock moving towards Rs 340-mark. CLICK HERE FOR THE CHART
 
Tata Consultancy Services (TCS)

Likely target: Rs 3,247 (after crossing Rs 3,160 mark)

Upside potential: 2.75%

After mildly dipping below the 100-DMA, the stock has shown a firm reversal with the current price trading above 50-DMA. Going forward, the stock needs to conquer the resistance of Rs 3,160 actively to rally towards Rs 3,247 levels. The RSI has formed a positive crossover, indicating a positive bias. CLICK HERE FOR THE CHART
 
Tata Elxsi Ltd (TATAELXSI)

Likely target: Rs 4,000 - Rs 4,200

Upside potential: 8.11% - 13.51%

The stock witnessed mild profit booking after claiming a new all-time high above Rs 4,000-mark. However, the medium-term outlook is bullish till it defends Rs 3,300-mark. The stock may remain sideways for some time and may move towards Rs 4,000 and Rs 4,200 levels in the coming sessions, as per the daily chart.  CLICK HERE FOR THE CHART
 
Tata Consumer Products Ltd (TATACONSUM)

Outlook: currently trading around 100-DMA

The stock is revolving around 100-DMA placed at Rs 618 levels. On the higher side, the resistance of 50-DMA, placed at Rs 641, needs to be conquered decisively to build a bullish outlook. A breakdown below 100-DMA may see the counter falling towards 200-DMA, located at Rs 562-mark, as per the daily chart. The RSI and MACD have seen negative crossover suggesting the sentiment would see aggression on either side if the crucial support of 100-DMA is broken. CLICK HERE FOR THE CHART