Shares of automobile companies, mainly hybrid car makers like Maruti Suzuki in India, are likely to be in focus on Tuesday July 09 following the registration fee waiver by the UP (Uttar Pradesh) state government.
According to automobile industry sources, the on-road prices of strong hybrid cars have decreased by up to Rs 4 lakh in Uttar Pradesh after the state government decided to waive registration fee on them in a bid to promote green technology.
Among listed players, Maruti Suzuki India is one of the leading car makers in the Indian hybrid market.
Maruti and Toyota, the other major hybrid car manufacturer in India are advocating for cuts in taxes on hybrid cars, while local manufacturers like Tata Motors and Mahindra & Mahindra (M&M) are pushing for full EV (Electric Vehicle) adoption. READ MORE
Meanwhile, as per another report by Business Standard, the government is likely to roll out electric vehicle policy guidelines by the end of September this year.
Against this background, what should your trading strategy be in auto stocks? Here’s a guide based on the technical charts of key auto shares in India.
Maruti Suzuki
Last close: Rs 12,024
Downside Risk: 6.9%
Support: Rs 11,960; Rs 11,900
Resistance: Rs 12,320; Rs 12,500
Maruti Suzuki stock has been a stark underperformer in the last two months or so. The stock has declined over 6 per cent since the end of April 2024, and failed to register a new high even as the benchmark Nifty 50 did so. In comparison, the Nifty 50 index has gained 7.6 per cent in the same period.
That apart, the stock is seen trading below its 20-WMA (Weekly Moving Average) for the third straight week. The 20-WMA stands at RS 12,325, which more or less coincides with the 20-DMA. Maruti will need to cross and sustain consistently above this key level in order to revive hopes of a recovery at the counter. Further, the stock will need to clear the hurdle at Rs 12,500 to negate the existing bearish bias.
On the flip side, failure to overcome these near-term challenges could exert downward pressure on the stock, and as such Maruti stock may slide to Rs 11,200 levels. The recent lows around Rs 11,900 – Rs 11,960 may act as immediate supports.
Tata Motors
Last close: Rs 1,003
Bias: Range-bound
Trading Range: Rs 920 – Rs 1,040
Support: Rs 975; Rs 950
Resistance: Rs 1,010
Technically, the stock is likely to exhibit a range-bound trend, unless and until there is a clear breakout in either direction. Interim support for the stock exists at Rs 975 and Rs 950; whereas, resistance is seen at Rs 1,010 levels.
Momentum oscillators on the long-term chart are showing signs of exhaustion; hence one needs to be watchful at higher levels.
Mahindra & Mahindra
Last close: Rs 2,851
Downside Risk: 9.7%
Support: Rs 2,775; Rs 2,715
Resistance: Rs 2,900; Rs 2,940
Mahindra & Mahindra (M&M) stock has been consistently testing support at its 20-DMA for the last eight trading sessions. The stock on Monday ended a wee bit below the 20-DMA, which stands at Rs 2,855. Further, momentum oscillators on the daily and weekly chart seem unfavourable at the moment; hence, the 20-DMA becomes a pivot for the stock.
First Published: Jul 09 2024 | 9:13 AM IST
Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.
