RECOMMENDATION - Buy at cmp of 74
Kindly note that it is a trading recommendation for the short term and strict adherence to stops is imperative.
Target -86, Stop-70.50, Time-T+14 DAYS
Rationale -
Performance Backdrop : The stock has been performing in line with the other auto stocks. A tapering off in momentum was witnessed in the last one month despite the robust run up in the broader market and the sector as a whole. This patch of underperformance did not create any lower tops and bottoms, thereby not contributing to any weakness.
Trendline - The recent drift in the stock prices have brought it very close to the trendline shown in the diagram above. This line is likely to act as a support for the stock.
Indicator - The Stochastic indicator is portraying an oversold reading - Oversold readings in established uptrends are good entry points judging from any yardstick.
The factors mentioned above in conjunction with other detailed technical studies prompt a buying opportunity in the stock for the short term for a target of 86. A stop of 70.50 (one percent filter below the trendline) may be observed to manage the downside risks.
Trendline - The recent drift in the stock prices have brought it very close to the trendline shown in the diagram above. This line is likely to act as a support for the stock.
Indicator - The Stochastic indicator is portraying an oversold reading - Oversold readings in established uptrends are good entry points judging from any yardstick.
The factors mentioned above in conjunction with other detailed technical studies prompt a buying opportunity in the stock for the short term for a target of 86. A stop of 70.50 (one percent filter below the trendline) may be observed to manage the downside risks.
Disclaimer : The recommendations mentioned herein are for educational purpose only. One should not take buy/sell decisions based on the above analysis which is prone to errors. The author does not undertake any liability whatsoever arising out of profits/losses accruing from using the above analysis.
