[Premium India] The Jewel Of India's Auto Industry: Tyres

JC Parets
February 2, 2018

Say what you want about rubber and tyres, but they seem to be a great business. I have a stock today that I wanted to share with you that I think does well moving forward, but also outperforms the rest of the auto industry.

We're talking about MRF Ltd as it completes what is close to a year-long consolidation. This comes within the context of a longer-term uptrend and momentum in a bullish range. We want to be buying $MRF for a breakout above the early Summer highs. If we're above 70,000 we want to be long with a target above 85,000:

Feel free to check out the Educational Section for more information on how I calculate the Fibonacci levels and gauge momentum strength. This one has all the things we look for in a stock.

Here is $MRF longer-term. The 1109 Extension target from the 2008 decline is above 84,300, giving us more reason to think that is the area where we're heading:

On a relative basis, this looks very interesting. This is the ratio of $MRF vs the NIFTY Auto Index. This to me looks like a major upside resolution is coming:

Based on the weight of the evidence, $MRF is one we want to own if we're above the above mentioned risk levels.

If you have any questions, feel free to contact me at any time.

The rest of the entire NIFTY Next 50 Index on both Daily & Weekly timeframes will be available in the Chartbook shortly. Keep an eye out for this and many more features being added in the coming weeks!

Cheers,

JC

Filed Under