- Summary:
- Tata Motors share price seems to be resisting breaking below the Rs 860 mark. We assess the chances of a reversal ahead of earnings release.
Tata Motors share price edged up on Monday as it traded at Rs 885.55 after rising by 2.4 percent at the time of writing. For the second successive session, the stock rejected attempts to break below the Rs 860 mark, signaling a potential reversal in the coming days.
Tata Motors (NSE: TATAMOTORS) has been on a steep decline since late August, and has lost 11 percent of its value in the last month. However, it is still up by 12 percent year-to-date, which has helped absorb the bearish sentiment. The prolonged Tata Motors share price decline was precipitated by weak second quarter earnings, which was attributed to a decline in sales.
A high interest rate environment has restricted access to loans, which has weighed down on demand. In India, the Reserve Bank of India (RBI) is expected to retain the long-running 6.5 percent interest rate for the rest of the year. That could suppress Tata’s performance in the domestic market.
However, lowering interest rates elsewhere in Tata Motors markets like the United States, the Eurozone and the UK could help improve sales of high-end models like Jaguar and Land Rover. That could potentially help register improved performance in the third quarter. The company will announce its Q3 earnings on November 8, providing a platform for a potential spike in its share price volatility.
Tata Motors share price prediction
Tata Motors share price pivots at 880.00, and the upside will prevail if the buyers keep it above that level. The momentum will likely encounter the first resistance at 885.65. However, an extended control by the buyers will breach that barrier and could test 889.10.
Alternatively, moving below 880.00 will signal control by the sellers. Look for the first support at 876.15, below which the upside narrative will be invalid. A stronger downward momentum could take the share price to test the second support at 871.90.
