Web Exclusive
Bajaj Auto, TVS: How to trade two-wheeler stocks this festive season

The cumulative retail sales of two-wheelers are estimated to have plunged 10 per cent YoY, said dealers
Two-wheeler stocks such as TVS Motor, Hero MotoCorp, and Bajaj Auto were among the top gainers on the Nifty Auto index, surging up to 1.6 per cent in the intra-day deals on the National Stock Exchange (NSE), on Tuesday. The move comes despite two-wheeler companies reporting sombre sales during the nine-day auspicious Navratri period -- the first leg of the festive season. 

The cumulative retail sales of two-wheelers are estimated to have plunged 10 per cent YoY, said dealers. They attributed the lacklustre sales to shuttered schools, colleges, and other commercial establishments accounting for a big share in urban markets. READ MORE

So, is the rally here to stay? Here's what charts suggest:

NIFTYAUTO: The index is holding the support of 100-weekly moving average (WMA), as per weekly charts. This demonstrates buying momentum around 7,650 to 7,750 levels, where the 100-WMA fluctuated in the previous month. On the downside, 50-WMA is placed at 7,174, which will act as the next support area. The technical indicators are not showing a strong positive momentum as Relative Strength Index (RSI) -- a metric to gauge bullish or bearish price momentum -- made a negative crossover exhibiting a weak trend. The Moving Average Convergence Divergence (MACD), too, is on the verge of a negative convergence. Key resistance for the index is placed at 200-WMA at 9,140 levels. CLICK HERE FOR THE CHART

 

Bajaj Auto Ltd (BAJAJA-AUTO): After a break-out above Rs 3,100 levels on the "Golden Cross" formation, the stock came under selling pressure, resulting in a dip towards Rs 2,850 levels, daily chart shows. That said, till the price stays above 200-days moving average (DMA), currently located at Rs 2,790 levels, the upside bias should prevail. The breakout scenario indicates a positive rally in the direction of Rs 3,700 to Rs 3,900 levels. CLICK HERE FOR THE CHART

 

Hero MotoCorp Ltd (HEROMOTOCO): The stock is re-testing the support of 200-WMA, currently set at Rs 2,858 levels. Till this support of 200-WMA is held on a closing basis, the stock can see rebound with a positive sentiment towards Rs 3,200 levels. Any failure to hold the support may hurt the market participants and stock may see a gradual slip towards 100-WMA placed at Rs 2,517 levels. CLICK HERE FOR THE CHART

TVS Motor Company Limited (TVSMOTOR): The counter is witnessing firm resistance at the 200-WMA placed at Rs 483 levels since August, 2020. A constant struggle to defeat the selling pressure resulted in a correction towards Rs 425 levels. The support now is found at 50-WMA placed at Rs 405, as per weekly chart. Any move outside these consolidating moving averages (50-WMA and 200-WMA) may define the next course of trend.. CLICK HERE FOR THE CHART

  

Eicher Motors Ltd (EICHERMOT): The weekly chart clearly shows the resistance of 200-WMA, which hints at consistent weakening of strength. If the RSI makes a negative crossover and fails to rebound, then the weakness may drag the stock towards Rs 1,933 levels, which is also its 100-WMA. In order to clock a meaningful rally, the counter needs to decisively close above its 200-WMA, placed at Rs 2,300. A breakout above it may lead the stock towards Rs 2,700 levels. CLICK HERE FOR THE CHART



Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel