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This Foreboding Sign Looms Over Tata Motors's Chart

Published 09/05/2022, 15:59
Updated 09/05/2022, 16:41
© Reuters.  This Foreboding Sign Looms Over Tata Motors's Chart

© Reuters. This Foreboding Sign Looms Over Tata Motors's Chart

If history is any guide, there may be trouble ahead for shares of Tata Motors (NYSE:TTM). A so-called "death cross" has formed on its chart and, not surprisingly, this could be bearish for the stock.

What To Know: Many traders use moving average crossover systems to make their decisions.

When a shorter-term average price crosses above a longer-term average price, it could mean the stock is trending higher. If the short-term average price crosses below the long-term average price, it means the trend is lower.

Why It's Important: The 50-day and the 200-day simple moving averages are commonly used.

The death cross occurs when the 50-day moves below the 200-day. This could mean the long-term trend is changing.

That just happened with Tata Motors, which is trading around $25.50 at publication time.

Remember: Seasoned investors don't blindly trade Death Crosses.

Instead, they use it as a signal to start looking for short positions based on other factors, like price levels and company fundamentals & events.

For seasoned investors, this is just a sign that it might be time to start considering possible short positions.

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Do you use the Death Cross signal in your trading or investing? Share this article with a friend if you found it helpful!

This article was generated by Benzinga's automated content engine and reviewed by an editor.

© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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