 "Automobile investments")
The Nifty auto index has rallied over 15 per cent to a high of 10,673 in the recent rebound. The bullish reversal seems to be witnessing a sideways movement now. Prior the rally, the Nifty Auto index had slipped 21 per cent, dropping to 9,226.
Shares of TVS Motor Company, Maruti, Bajaj Auto and Tata Motors saw approximately 19-21 per cent jump each, from their recent lows in this rebound.
At the current juncture, the Nifty Auto index and the key stocks are trading near significant resistance levels and exhibiting sideways movement, any breakout could see long additions. Here’s the current scenario and outlook for the auto sector based on the technical charts:-
NIFTY AUTO INDEX
Outlook: Attempting to conquer the 200-WMA
The Nifty Auto index has resistance at 10,668, which is its 50-weekly moving average (WMA). The support for the index exists at 10,200 and as long as the index protects this mark, the positive bias could see efforts to conquer the 50-WMA. CLICK HERE FOR THE CHART
Bajaj Auto Ltd (BAJAJA-AUTO)
Likely target: Rs 4,000 (after conquering 200-DMA)
Upside potential: 9%
Shares of Bajaj Auto are struggling to conquer the 200-day moving average (DMA), presently set at Rs 3,655. The candlestick formations display sideways momentum, an effort to take out the 200-DMA hurdle. When this does happen, the stock could soar towards Rs 4,000-mark. The MACD has conquered the zero line, an indicator that shows positive momentum. CLICK HERE FOR THE CHART
TVS Motor Company Limited (TVSMOTOR)
Likely target: Rs 660 ( breakout after a strong close)
Upside potential: 8%
TVS Motor is hovering around its 200-DMA located at Rs 608.50. Any decisive closing hereon would mean a possible breakout. This can be confirmed, if the positive close is accompanied by robust volume. A breakout may provide another 8 - 10 per cent jump towards Rs 660 levels as Relative Strength Index (RSI) comfortably trades in positive crossover. CLICK HERE FOR THE CHART
Tata Motors Ltd (TATAMOTORS)
Likely target: Rs 480
Upside potential: 10%
Gradual buying interest on subsequent support levels indicates a positive direction for the stock towards Rs 480 level, its 100-DMA mark. The stock effectively trades above the 200-DMA, a barometer that investor consider highly relevant while choosing a stock. Immediate support for the stock exists at Rs 420. CLICK HERE FOR THE CHART
Maruti Suzuki India (MARUTI)
Outlook: testing times at 200-DMA
Shares of Maruti Suzuki are testing the support of the 200-DMA. If it defends the major support, it could revive its positive trend and may see an addition in longs. The major support for the stock exists at Rs 7,000-mark. CLICK HERE FOR THE CHART
