When it comes to the Auto Industry and especially the two-wheeler industry, the two names that come to our mind are Hero Honda & Bajaj Auto.
In the short term, the technical outlook these stocks suggest that while Hero Honda is heading towards a clean move towards 1950, Bajaj may be due for some more correction.
Hero Honda:
From the past 4-5 months, the stock has been making big moves. Its a trending stock but a highly volatile one. Prices breakout from the downward sloping trendline. Also there is a signal of a crossover in the MACD towards the positive side. The stock should face some resistance towards the upper band where one should book profits. Refer to the chart for price specifics.
Bajaj Auto:
Bajaj Auto had fallen about 12-13% from the breakout of the rising wedge formation some days back.
The charts are showing the formation of a Flag pattern.
Note that since the stock is in a downtrend and the flag is rising (facing up), it increases the probabilities of more downward movement post breakout.
Investors (buy side) should avoid the stock for the near future.
Shorting opportunities can be looked forward to post breakout.
The broader markets are not making any significant moves either ways.
Though headline inflation came down marginally down to 8.66% (April data), the petrol hike and the diesel hikes (that are proposed) will ensure that it will not reduce significantly.
Thus the markets might do not have more positive triggers after the election results to rally.
Its the individual stocks that matter as of now.
In the short term, the technical outlook these stocks suggest that while Hero Honda is heading towards a clean move towards 1950, Bajaj may be due for some more correction.
Hero Honda:
Bajaj Auto:
The charts are showing the formation of a Flag pattern.
Note that since the stock is in a downtrend and the flag is rising (facing up), it increases the probabilities of more downward movement post breakout.
Investors (buy side) should avoid the stock for the near future.
Shorting opportunities can be looked forward to post breakout.
The broader markets are not making any significant moves either ways.
Though headline inflation came down marginally down to 8.66% (April data), the petrol hike and the diesel hikes (that are proposed) will ensure that it will not reduce significantly.
Thus the markets might do not have more positive triggers after the election results to rally.
Its the individual stocks that matter as of now.
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