Tata Motors Share Price Bearishness Sends Stock to YTD Lows

Summary:
• Tata Motors share price declined to the lowest in 2024, as weak earnings and soft outlook add pressure. Here's why further losses are likely.

Tata Motors share price extended its loss-making streak, plummeting to year-to-date lows of $759.20 on Monday. The recent string of losses has seen the stock lose 13.7 percent of its value in the last month and is down by 1.6 percent year-to date as of this writing.

The downtrend has been exacerbated by a weak earnings report released last week, in which the company missed its Earnings Per Share (EPS) by 24.4 percent. A second successive double-digit quarterly EPS miss underpinned by falling sales have coupled up to create a bearishness that could extend in the coming days.

Tata Motors (NSE: TATAMOTORS) share price has broken below key indicative moving averages, signaling a weak upside traction. The 50 MA broke below the 200-MA in late October, confirming the bearish control. In addition, the stock trades below the 20, 50 and 100 Exponential Moving Average (EMA) levels on the daily chart.

Tata has increased its focus on the electric vehicle (EV) line of business, manufacturing both commercial and passenger vehicles. This has come with incentives such as discounts on purchases, free charging and battery rentals. However, it faces stiff competition from China’s heavily subsidised EVs.

Also, Tata’s Jaguar Land Rover (JLR) unit has faced production constraints in recent months driven by reduced output by its key aluminium supplier in Switzerland. JLR accounts for about two-thirds of Tata Motors’ revenues and the disruption affected earnings from its luxury vehicle models. The company expects JLR to return to profitability by March 2025 as material supply stabilises.

Tata Motors share price prediction

Tata Motors share price pivots at 748.50, and the decline will continue if resistance persists at that level. The momentum will likely find the first support at 743.70, but extended control by the sellers could break below that level and test 740.10.

Alternatively, moving above 748.50 will put the buyers in control. The resulting momentum is likely to move TATAMOTORS to find the first barrier at 752.50. However, a stronger upside momentum could break above that level and render the downside narrative invalid. Also, the price could rise to test the second resistance at 755.50.