MRF stock on course to hit Rs 100,000-mark. Is it a good time to buy?

The monthly chart shows a strong bullish sentiment if the stock closes above 95,000 levels

Tyre stocks defied market gravity on Thursday and surged up to 10 per cent on the BSE as healthy automobile sales' recovery in January, and likely roll out of voluntary scrappage policy kept sentiment buoyant in the sector. 

Shares of Apollo Tyres hit 10 per cent upper circuit, while those of JK Tyre and Industries, Birla Tyres, CEAT, and Balkrishna Industries jumped up to 6 per cent. In comparison, the S&P BSE Sensex index was trading around 180 points or 0.3 per cent lower at 11:00 AM.

Among these, stock of MRF, which advanced 4 per cent at the bourses today, is on course to make history by steadily marching towards the Rs 100,000 apiece-mark. 

In the intra-day deals today, the stock hit a high of Rs 93,768, and is just 3 per cent away from its record high of Rs 96,456 per share, touched on January 21, 2021. In the past one year, the stock has gained 30 per cent on the BSE, compared with a 26.3 per cent rally in the benchmark Nifty50 index, and 34.5 per cent rise in Nifty Auto index, ACE Equity data show. 

On the technical front, the stock is in an uptrend, taking support of 50-days moving average (DMA) placed at Rs 81,519 levels. As per the daily chart levels, the current momentum in the stock exhibits an accumulation phase in the range of Rs 89,000 to Rs 85,000.

Over the medium-term, the outlook is optimistic till it defends the breakout level of Rs 80,000. Further, if the stock manages to sustain above the Rs 85,000-mark, the upside bias may open doors for the uncharted territory of Rs 1,10,000 levels. The volume structure is indicating a bullish sentiment with a gradual rise, as per the weekly chart.

The monthly chart also shows a strong bullish sentiment if the stock closes above 95,000 levels. Upon a decisive close above this level, market participants are expected to remain long eyeing long-term growth outlook. 

Overall, even as technical indicators hint at minor pressure in the overbought condition, the underlying strength is resilient to breach major support levels. CLICK HERE FOR THE CHART