Tata Motors, M&M, Maruti Suzuki: How should you trade these auto stocks?

Positive domestic and global cues lifted the benchmark indices higher for the straight eight session on Wednesday. The BSE Sensex rose 235.05 points, or 0.39 per cent, to settle at 60,392.77. The NSE barometer Nifty gained 90.10 points, or 0.51 per cent, to settle at 17,812.40.

Auto as a pack led gainers for the session, with Tata Motors, Mahindra & Mahindra (M&M) and Maruti Suzuki India hogging limelight for the day. Here is what Laxmikant Shukla, Technical Research Analyst at YES Securities has to say on these three stocks ahead of Thursday's trading session:

Tata Motors | Buy | Target Price: Rs 530 | Stop Loss: Rs 425
Tata Motors has been witnessing strong moves in the last two days. It has surged above a cluster of its exponential moving averages on the daily chart. The stock recently saw some buying and emerged above the sloping trendline on the daily time frame, adding to the bullish sentiment. Primary indicators align with the trend, suggest a continuation of the movement in a comparable period. Hence, we recommend buying the stock with a stop loss of Rs 425 and a target of Rs 530.

Mahindra & Mahindra | Buy | Target Price: Rs 1,390 | Stop Loss: Rs 1,120
Mahindra & Mahindra (M&M) shares look lucrative after showing 20 per cent post correction. The stock registered a high of Rs 1,397 on February 17. It bottomed out near the 38.2 per cent Fibonacci retracement of the previous leg from the support zone of Rs 1,120-1,125. Further the upside movement is getting better with the RSI indicating a decent prominent reversal pattern from the highly oversold zone. One can buy and accumulate the stock for an upside initial target of Rs 1,390, keeping a stop loss of Rs 1,120 on a closing basis.

Maruti Suzuki India | Range-bound | Resistance: Rs 8,750 | Support: Rs 8,390
Maruti Suzuki has been making a higher top-bottom formation on the weekly chart for three weeks now, which resulted in a whopping 7 per cent return. One needs to be alert because it has made a ‘Dark Cloud Cover’ candlestick pattern at 200 DMA’, where its historical resistance zone is also placed near Rs 8,710-8,750, which hints towards some profit in the coming few sessions. On the indicator front, daily MACD is overstretched and daily RSI failed to surpass 60 levels, which is a matter of concern. It could be an early sign of bearishness in the scrip. One should book profit in the range of Rs 8,620-8,650. Fresh buy is not advised as of now.


(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Business Today)

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