Shares of select tyremakers such as CEAT Ltd, JK Tyre & Industries Ltd and Apollo Tyres Ltd saw a sharp uptick in Friday's trading session. Out of the three mentioned stocks, CEAT emerged as the highest gainer by rising 12.40 per cent to hit a day high of Rs 2,918.
JK Tyre shares surged 9.58 per cent to scale a high of Rs 432 while Apollo Tyres jumped 5.83 per cent to hit Rs 547.35 level.
The entire tyre basket is looking positive, Nilesh Jain, AVP - Derivative and Technical Research at Centrum Broking, told Business Today TV.
"Within this space, we have our conviction with Apollo Tyres. The stock has potential to hit upside targets of Rs 570-600. Any meaningful correction can be used as a buying opportunity. Keep stop loss below Rs 520," Jain stated.
The market expert also mentioned that JK Tyre has witnessed a good consolidation breakout. "At present, risk-reward is not looking favourable and one should wait for some correction after today's sharp run-up. On the higher side, expected near-term targets will be Rs 450-460," he suggested.
Nuvama Institutional Equities said there's a bullish structural confirmation in weekly charts of tyre stocks that are catching strong attention.
"The current formation suggests that the sector is stepping up for new highs as there is strong relative outperformance supported by bullish momentum. The broader theme looks positive and hints at a big upside to unfold in the coming months, the brokerage mentioned.
It has given 'Buy' calls for CEAT and Apollo Tyres. Nuvama sees CEAT between Rs 3,100 and Rs 3,700 levels with a stop loss placed at Rs 2,520. For Apollo Tyres, the brokerage suggests target prices between Rs 625 and 720, keeping a stop loss at Rs 484.
Separately, a few technical analysts also remained positive on CEAT shares. Ravi Singh, Senior Vice-President (Retail Research) at Religare Broking, said, The stock can hit Rs 3,000 in the near term. Keep stop loss placed at Rs 2,700."
Shiju Koothupalakkal, Technical Research Analyst at Prabhudas Lilladher, said a decisive breach above Rs 3,000 level could trigger a fresh upward move for CEAT.
"Next visible upside targets are Rs 3,240 and Rs 3,380 levels. From the current rate, Rs 2,730 would be maintained as the support zone," Koothupalakkal added.