Tata Motors results are on Aug 11, 2014, and here's how stock appears on the daily chart.
As you can see in the chart above: Tata Motors has been in nice uptrend. The stock found excellent support at 200 dma on Feb 03 2014 and since then has done very well. It first rallied from 330 to 421 in a month's time in Feb. It then pulled back and took support at 75 dma and bounced again. Since then stock has nicely trended up with 75 dma as support.
Once again stock is at 75 dma just before earnings. Will stock hold up here and rally post earnings or will it crack and go down to 200 dma (406). Well, that's the tough question to answer right now.
How should one trade?
Look out for stock reaction on August 11. Generally, false breakdown can be excellent buying opportunity i.e. stock breaks down post earnings below 75 dma intra-day and then recovers by the end of the trading day. That will be good buy signal then. Any long position should have stop loss at 3% below 75 dma.
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers