(Bloomberg) — Shares of Tata Motors Ltd. are set to move sharply after about a month with no real direction, according to signals from one of the most widely used technical indicators.
A study using the Bollinger BandWidth shows a so-called coiling pattern that in the past heralded a period of heightened volatility. The coil — the shrinking gap between the upper and lower bands — is the tightest in 15 months, and the stock moved an average 30% in the seven instances since the Covid-induced crash of March 2020 when the bandwidth was similarly narrow.
India’s second-largest automaker has advanced 184% this year as investors bet that its trimmed down costs, new model offerings and improved leverage ratios will boost shares. The company also holds more than 70% of the country’s nascent electric-car market, attracting investments from TPG and others.
The firm is betting on the electric shift even as one of Asia’s most-polluted nations has fallen behind other countries with battery models accounting for just 1% of annual sales. Tata Motors will invest about $2 billion over five years in its electric vehicle unit, Chief Financial Officer P.B. Balaji said in October, and the firm aims for 20% of total sales to be electric by 2026, with plans to roll out 10 battery models by that date.
Tata Motors was trading up 2.7% at 519.2 rupees a share as of 11:51 a.m. in Mumbai Tuesday, while the benchmark index was down 0.3%.
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