Indian multinational automotive manufacturing company, Tata Motors, is having a terrible day in the markets. Tata Motors share price is trading at its lowest level since September 2009. As of this writing, it is at 100.50.
Aside from concerns posed by the coronavirus outbreak and the oil price war, demand for the stock is dampened by weak sales of its subsidiary, Jaguar Land Rover (JLR). JLR had a 25% growth rate on an annual basis from July to December 2019 in its Chinese retail market. However, this February, it dropped by 85%. Analysts that worried that it would take a while for operations in China to go back to normal despite reports that some factories in Wuhan have re-opened. It has been estimated that Tata Motors consolidated earning for the year would fall by 35%.
Read our Best Trading Ideas for 2020.
Tata Motors Share Price Outlook
On the monthly time frame, a head and shoulders chart pattern has formed on Tata Motors share price. This is evidenced by the higher highs that the stock made from December 2010 to February 2015 which were followed by lower highs in 2019. This is considered as a bearish reversal pattern and if sellers maintain momentum, we could see a sell-off on Tata Motors share price. It could drop to its January 2009 lows at 24.70.
On the other hand, if the company can turn its finances around sooner that analysts think, Tata Motors share price could trade higher. Near-term resistance is around 108.55 where the stock previously found support in September 2019.