Call writing at Rs 520 signals limited upside for Tata Motors this month
Mumbai: Tata Motors' stock is like y to be muted in the rest of the February series after a poor show in he third quarter earnings, with 520-level expected to act as a stiff hurdle as significant call writing was seen at that strike, derivative analysts said.
“The stock has broken its weekly support of Rs 500 and is also trading below its 200-day simple moving av rage as well as 50-day simple moving average. Hence, weakness is likely to continue,“ said Chandan Taparia, derivative analyst at Motilal Oswal Securities.
Currently, the stock's 200-day moving average is at Rs 490.3 and 50-day moving average is at Rs 496.9.
Posting its biggest one-day fall in three months, the stock ended down 4.6% at Rs 482.05 on the NSE and lost Rs 5,370-crore in market capitalisation. Its differential voting rights shares ended down 6% at Rs 297.75.Open interest in the company's February futures jumped 9%.
The auto maker reported December quarter earnings in the last half-an-hour of trade on Tuesday. The company's consolidated net profit slumped 96.2% from a year ago to Rs 112 crore due to weak performance by subsidiary Jaguar Land Rover Automotive.JLR reported a net profit of £167 million in the quarter, down from £440 million last year.
“The Rs 520-call saw significant addition on the short side before the results. It will be difficult for the stock to cross the level in this series,“ said Amit Gupta, head of derivatives at ICICIdirect.
“The stock has broken its weekly support of Rs 500 and is also trading below its 200-day simple moving av rage as well as 50-day simple moving average. Hence, weakness is likely to continue,“ said Chandan Taparia, derivative analyst at Motilal Oswal Securities.
Currently, the stock's 200-day moving average is at Rs 490.3 and 50-day moving average is at Rs 496.9.
Posting its biggest one-day fall in three months, the stock ended down 4.6% at Rs 482.05 on the NSE and lost Rs 5,370-crore in market capitalisation. Its differential voting rights shares ended down 6% at Rs 297.75.Open interest in the company's February futures jumped 9%.
The auto maker reported December quarter earnings in the last half-an-hour of trade on Tuesday. The company's consolidated net profit slumped 96.2% from a year ago to Rs 112 crore due to weak performance by subsidiary Jaguar Land Rover Automotive.JLR reported a net profit of £167 million in the quarter, down from £440 million last year.
“The Rs 520-call saw significant addition on the short side before the results. It will be difficult for the stock to cross the level in this series,“ said Amit Gupta, head of derivatives at ICICIdirect.
