Tata Motors stock price has extended its decline to the third straight session as investors ease their exposure on the back of a revised guidance. News of Jaguar Land Rover (JLR) division reducing its EBIT guidance from 10% to 5%-7% signals trying times for the company amid increased pressure from trade tariffs. The stock has declined by 8.9% in the last five sessions and traded at ₹670 at the time of writing, down by 0.7% on the daily time frame.
As a result of its recent troubles, Tata Motors stock price trades below key moving averages, including 9, 21, 50 and 200-day Exponential Moving Average (EMA) levels. In addition, it has crossed below the lower Bollinger Band on the daily chart, with the RSI at 37. These indicators signal that the stock will likely stay on the downward trajectory in the near-term.
In terms of fundamentals, the Jaguar Land Rover faces reduced demand from China, where many buyers are increasingly shifting towards cheaper local alternatives. In addition, the impact of trade tariffs in the United States will likely see foreign automakers struggle to increase their sales and margins.
As a result of these new developments, Tata Motors (BSE: TATAMOTORS) management is planning to shift more towards EVs and implement cost cutting measures aimed at saving £1.4 billion at JLR. Analysts have downgraded their outlooks for the company, highlighting its declining sales and low free cash flow.
Tata Motors Share Price Prediction
The momentum on Tata Motors share price calls for further downside below ₹685. That will likely see initial support established at ₹665. However, an extended control by the sellers will send the action lower to test ₹660.
On the other hand, breaking above ₹675 will favour the buyers to take control. That will likely see the first barrier formed at ₹680. Action above that level will invalidate the downside narrative and potentially send the stock higher to test ₹684 in extension.
