Is the upmove in Maruti sustainable?

Under pressure from institutional investors to rescind its decision to develop its Gujarat manufacturing facilities through a wholly-owned subsidiary of Japanese parent Suzuki Motor Corporation (SMC), Maruti Suzuki on Saturday revised key terms of the agreement.

The changes, aimed at making the deal more tenable, include removal of mark-ups on cars sold by Suzuki to Maruti. Also, the company will seek minority shareholders’ approval and execute the plan only after assent from three-fourths of them.

This climb down triggered a rally in the company stock on the BSE and NSE right at the start of the trading session.

At 0930 hrs, the stock rallied 9% to Rs 1,900, also its record high on the BSE. But is this upmove sustainable?

Technical analyst Ravi Nathani shares his view on the stock and markets in general.

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