Thursday, March 7, 2013

Tata Motors

Tata Motors, TTM, traded down a bit today. Weekly chart below.

www.freestockcharts.com

The ascending triangle is fairly obvious. This one is fairly mature so it'll probably break out in the next six to twelve weeks. The price target is off screen but it's about 46.00, not bad from the current 28.00. Range right now is from 24.70 to 30.90 so it's currently trading in the higher half of that. It might go back down to the bottom of the formation before a breakout so waiting for a better price is probably an OK idea. Of course the best thing to do would be to buy the break just in case the pattern decides to fail. Decide for yourself what level of risk you're comfortable with. Some hypothetical trading points below.

Entry1: 31.50 (Close above the top)
TP: 40.00, 42.00, 45.00 (Anywhere under 46.00 is fine)
SL: 26.60, 24.00 (Either under the 100 day or under the bottom of the pattern. A tighter exit could be 30.00 but sometimes there is a small retrace after a break, 30.00 would probably get thrown out)

Entry2: 25.00 (Above the bottom of the formation)
TP: 40.00, 42.00, 45.00
SL: 24.00, 23.00 (23.00 is just under the 100 week MA)

The first entry has a higher potential loss but I would consider it the safer entry, less chance of the pattern being a dud. Still, an entry at 25.00 looks very attractive to me and the risk is only 1.00 or 2.00 which isn't horrible. I might end up buying this one if it hits 25.00.


If you have a stock you want analyzed leave it in the comments. 

Do your own research before taking any position. I don't have a position in TTM but I might initiate one at some point in next few weeks. 

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