Image via WikipediaShares of the Indian car maker Tata Motors (TTM) have been on a tear. The latest up leg is based on the excitement over Tata Motors projecting 250,000 light commercial vehicle sales next years compared to 150,000 vehicles in the prior period.
Considering torrid pace of the Indian economy, the new projections are not a surprise to us. Indeed, they are also not much of a surprise in India as is evidenced by the trading pattern of Tata Motors’ stock in India. However, the momentum crowd in the USA has gotten overly excited and keeps running up the shares listed in New York. Indian listed shares consistently lag trading in New York.
Those doing proper fundamental analysis keep on shorting the stock. This further helps the stock to rise as the shorts panic to buy back when they are squeezed. We caution against taking a full short position here. The best course of action is to simply dip a toe in the water on the short side here and add to it on up spikes.
